What agents need to know about insuring SMRs, hydrogen, and other fast-moving environmental risks
Whether it’s hydrogen fuel systems or small modular reactors (SMRs), clients across energy, infrastructure, and manufacturing are moving fast to find new ways to generate and store power. But while technology is hitting light speed, the insurance market is still stuck at the starting line. Recently, Loren Henry, VP of the Environmental and Energy Practice at Jencap, weighed in on this exact friction. He noted a recurring theme: the technology itself isn’t usually the bottleneck. The real hurdle is what happens when that tech hits an underwriter’s desk. Can we actually get it insured?
When Underwriting Comfort Can’t Keep Up
New environmental technologies don’t usually fit into the neat little boxes traditional underwriting frameworks prefer. Because these exposures are so fresh, they come with a few pieces of baggage that make carriers nervous. There’s almost no historical loss data, the regulations are still being written, and carrier appetite is, frankly, all over the place. We’re seeing this most clearly in two specific areas: SMRs and hydrogen.
Small Modular Reactors: The Access Problem
SMRs are gaining a ton of traction because they’re flexible and scalable. But from a placement perspective, the problem is that most standard carriers have their hands tied. Almost every standard policy includes a hard nuclear exposure exclusion. They literally aren’t allowed to touch them. This means your options for SMRs are extremely narrow, usually restricted to surplus lines carriers. If you don’t realize that going in, you’ll find yourself handcuffed quickly, even with a perfect submission.
Hydrogen: The Unknown Factor
Hydrogen is back in the spotlight, but it’s a moving target for underwriters. Part of the headache is that hydrogen isn’t just one thing. Hydrogen fuel risk profiles vary wildly. Since some are much more volatile than others, many carriers just choose to exclude the whole category rather than try to figure out the nuances.
There’s also a massive experience gap. Many underwriters haven’t seen enough of these risks to feel confident. When an underwriter is looking at a high-stakes risk like hydrogen extraction, which is the most volatile and difficult phase to cover, they’ll lean toward a no-quote simply because they don’t have the knowledge base to price it accurately.
A Better Way to Position Your Clients
If you have a client moving into the environmental tech space, a few proactive steps can help smooth the path with underwriters:
- Break down the lifecycle. Be very specific about where the exposure lives. Is it storage, distribution, or the high-risk extraction phase?
- Over-document everything. The more operational detail you can provide early on, the easier it is for a specialist to find a home for it.
- Address exclusions head-on. Don’t wait for the carrier to find the exclusion; identify the gaps early so you can find a workaround.
- Manage the timeline. These placements take longer. Set that expectation with your client on day one.
The Specialty Advantage with Jencap
Emerging risks require an entirely different map. Most retail agents don’t have a direct line to dedicated energy divisions or the specific E&S markets that actually understand these technologies. But you do now. Jencap can be your first call moving forward. We speak the underwriter’s language and structure these complex submissions so that they don’t just end up in the “no” pile.
Our energy experts are ready to help you place your next risk. Reach out today to start a conversation, and let’s see what we can do together.
FAQ
Are small modular reactors actually insurable right now?
Yes, but it’s a niche market. Because of standard nuclear exclusions, you’ll almost always be looking at surplus lines or very specific specialized programs.
What makes hydrogen so tough for carriers?
It’s a mix of high volatility (especially in extraction) and a lack of historical data. Many carriers find it easier to exclude it than to try and differentiate between the different types of hydrogen risk.
Is hydrogen always “high risk”?
Not necessarily. It becomes much more stable once processed, but the initial perception of volatility often leads carriers to take an “all-or-nothing” exclusionary approach.
Do these risks always end up in the non-admitted market?
Usually, yes. For SMRs and complex hydrogen setups, the admitted market rarely has the flexibility or the filings to handle them.
When should I involve a specialist?
The earlier, the better. If you wait until the standard markets have already declined it, you’ve lost valuable time.
