Technology Performance Insurance

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Technology Performance Insurance addresses performance risk in the operation of a technology by guaranteeing a level of production sufficient to meet debt servicing or by supporting the warranty obligation of the insurance provider, this type of specialist insurance can be used to facilitate financing.

Matrix collaborates with insurance and reinsurance partners to transfer precisely measured technology and financial risks to the insurance markets, which provides clients with the necessary financial and customer support to expedite their innovations. Insufficient data often obstructs revolutionary technologies from obtaining financing, entering the market, and gaining widespread consumer acceptance.

Using unique proprietary modelling to evaluate the unpredictability of technology performance and dependability, as well as the associated economics, and in turn defining practical consequences of a project or new technology. A new technology developer may need Technology Performance Insurance for several reasons:

• Securing Investor & Lender Confidence: Investors and lenders want assurance that their investments are protected from risks that may arise during the project lifecycle. Technology Performance Insurance can provide such assurance, thus increasing the confidence of investors and lenders in the project.
• Facilitating Business Growth: With Technology Performance Insurance, project developers can focus on growing their business without worrying about technology risks. They can use the insurance coverage to expand their operations, develop new products, or enter new markets with confidence.
• Mitigating Technology Risks: Technology is an integral part of most business operations, and any disruption to it can have a significant impact on a project’s success. Technology Performance Insurance can provide protection against a wide range of technology-related risks, such as system failures, data breaches, cyber attacks, and software glitches.
• Minimizing Financial Losses: In case of technology-related disruptions, the cost of repairing or replacing damaged equipment, restoring lost data, and addressing any legal liabilities can be significant. Technology Performance Insurance can help project developers minimize these financial losses.

The challenge facing Private Equity houses and institutional lenders wanting to invest in new and cutting edge technologies is in establishing the necessary confidence in the production processes of the venture and substantiating the anticipated revenue streams to the benefit of all the stakeholders involved in the project.

From the investors perspective, the requirement is to effect an insurance cover for new technology risks associated with the manufacturing process so as to secure initial financing.

Technology Performance Insurance provides a comprehensive solution to address technology-related risks and liabilities that new technology and project developers may face, during the project lifecycle. A TPI Policy can help project developers to protect their investments, increase investor and lender confidence, comply with regulations, minimize financial losses, and facilitate commercial growth and scale. But how is a TPI Policy actually formulated?

The process for assessing technology performance involves reviewing (and a deep knowledge of) recent developments and insights in science, engineering, and big data. The process includes analyzing engineering reports, test data, and economics, as well as conducting onsite facility visits.

Proprietary technological-economic parameters are then used to measure risk based on technology use and financing. A proprietary modelling review includes technical considerations such as scale-up analysis, performance data, EPC and key contracts, design and manufacturing plans, and operations and maintenance plans. Use case, economics, and financing are integrated to align interests and address technical risks with overall cost-effective insurances.

Economic considerations include contractual structure, debt service coverage ratio, all-party alignment of interest, project cash flow and reserves, project stakeholder requirements, and value of insurance.

Technology Performance Policies have been written for the following technologies:

• Anaerobic Digesters
• Biofuels & Chemicals
• Biomass Processing
• Carbon Capture
• Energy Storage & Efficiency
• Fuel Cells – Grid
• Industrial Processes
• Renewable Energy
• Waste to Energy
• Water Treatment