The Joint Power Generation Committee convened at LMA Meeting Room 1, with broad representation from market participants and LMA staff. The meeting was conducted in accordance with competition law, ensuring no discussion of prohibited subjects such as pricing or confidential terms.

Key Topics & Discussion Themes

1. Use of Outdated Clauses (NMA2914/NMA2915)

• Members noted the continued use of clause NMA2914, which is over 25 years old and not fit for current cyber exposures. The clause’s limitations and misunderstandings around risk coverage were highlighted, especially in the oil and gas sector. The Committee agreed on the need for updated wordings and clear communication to new MGAs, with Lloyd’s focusing on clarity and discipline in the market.

2. Obsolescence Clause Update

• Feedback on the new “Economic Limit” clause was generally positive, though some brokers and clients found it challenging to implement. Guidance notes are to be circulated to aid understanding.

3. Market Issues & Claims

• Several significant losses were reported, including a $100m wind farm claim due to obsolete turbine blades, transformer failures in Arizona and Texas, and inflation-driven increases in claim values. Concerns were raised about OEM transformer lead times and the impact of inflation on retention and claims. The Committee discussed the importance of relevant clauses to address these exposures.

4. Renewables Energy Committee Updates

• The market direction was viewed as challenging, with particular scrutiny on hail sub-limits following losses in Texas. Construction activity in renewables was noted, and Aon’s study of the Nordic market was mentioned.

5. AOB & Market Communications

• Efforts to develop market communications with a Brazilian law firm continue, though clarity on legal frameworks is pending. Social matters, including the organisation of the Christmas curry, were briefly discussed.