SAMP Risk, the connected-insurance subsidiary of Asset Performance Partners, has called on the insurance market to rethink how it underwrites power generation risk, warning that intensifying heatwaves are creating a category of exposure that is currently sitting largely unhedged on generators’ own balance sheets.
The intervention follows a July 2026 grid emergency on the PJM Interconnection, the largest wholesale electricity market in the United States, during which the US Department of Energy issued two emergency orders allowing power plants to run above normal emissions limits and directing large facilities to switch to backup generation at short notice. SAMP Risk argues the episode illustrates a structural gap between the operating conditions insurers assumed when they wrote coverage and the real-world conditions generators are increasingly facing.
The financial exposure
The risk for generators is twofold, according to the company. During a high-demand, low-supply event, a plant that cannot increase output misses concentrated revenue in precisely the window when prices are highest. More damaging is the second scenario: if a plant has committed power to the grid and then fails to deliver, it becomes liable for buying replacement capacity on the open market at spot prices that can spike sharply during an emergency.
Extreme heat also works against supply at the infrastructure level. High ambient temperatures reduce wind speeds, cutting output from wind farms, while conventional thermal plant efficiency falls as coolant water warms. The combination of surging demand and constrained supply is, in the company’s framing, exactly the set of conditions under which a mechanical failure becomes most expensive.
Alistair Moodie, chief product officer at SAMP Risk, said: “As power gen operators come under pressure to increase supply during periods of extreme demand, telematics data from the site can give operators and insurers a live view of asset performance, so problems are caught before they become losses, and risk is priced on real operating conditions rather than assumptions.”
Market context and regulatory read-across
The case SAMP Risk is making is effectively a parametric and telematics-driven argument against the conventional survey-based underwriting cycle, which prices risk at a point in time rather than continuously. The comparison to black-box motor insurance is deliberate: that market proved that behavioural and operational data could improve loss ratios and open new segments. Whether the same logic transfers cleanly to energy infrastructure depends on the quality and consistency of the telematics feed and whether loss events are granular enough to calibrate the model.
The regulatory backdrop adds pressure. In the UK, the National Grid Electricity System Operator faces growing scrutiny of its resilience planning as summer peak demand events become more common. Ofgem’s ongoing review of network resilience and balancing costs raises the prospect that generators carrying unhedged capacity-replacement exposure could face additional compliance obligations if regulators tighten rules around grid commitments.
In the Lloyd‘s market, where SAMP Risk is backed and where it completed the Lloyd’s Lab accelerator programme, appetite for climate-adjacent specialty lines has been growing but is accompanied by tighter modelling requirements. Underwriters who cannot demonstrate a credible dynamic risk model face pressure to restrict or reprice the cover they offer. For SAMP Risk, that structural pressure in the market is the commercial opportunity it is trying to capture.
The next milestones to watch are whether the company names an insurer or managing general agent adopting the platform at scale, and whether the UK grid does formally invoke emergency powers in a future heat event of the kind that occurred in the US this July.
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