Sound Policy: Inside FM’s new report on power generation losses
Publish Date •
09 July 2026
On this episode of Sound Policy, we explore FM’s new report on losses in the power generation industry. From electrification and AI infrastructure to aging equipment and evolving supply chains, companies are balancing increasing complexity while delivering consistent electricity.
Host Brian Amaral speaks with Brian Palmer and Austin Larkin of FM about recent loss trends across the industry. They discuss what’s driving losses, why mechanical and electrical breakdowns play such a large role, and how longer lead times for critical equipment are raising the stakes when outages occur.
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An automatically generated transcript follows.
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Transcript
Brian Amaral (Host)
Brian, I want to start with you. You helped develop this report. Anything that jumps out at you as the biggest, maybe, surprise? The biggest takeaway off the top?
Brian Palmer
So, there was really, the two big hitters were the mechanical and electrical breakdown associated with PowerGen. Seeing how large of a bucket of losses were associated with mechanical and electrical breakdown. And we can talk a little bit more about what equipment was associated with that as we go through here.
Brian Amaral (Host)
So Austin, I want to bring you into this as well. You oversee the southeast region for FM—a lot of power generation clients. Why is this sort of report important for power generation businesses?
Austin Larkin
Well, power generation clients are really charged with providing reliable electricity to all of their customers. This report is incredibly important to them because it identifies those exposures and drivers of loss and brings those to the forefront. There’s a lot happening in the PowerGen industry, and it’s a very complex industry to be in right now. This report cuts through the noise and gets straight to the signal.
Brian Amaral (Host)
What are they facing, largely? What are some of the big concerns you’re hearing about from power generation clients?
Austin Larkin
It’s an incredibly complex time to be a provider of electricity. Demand is going up. We have AI infrastructure being put in place. We have aging infrastructure. There’s electrification happening across the United States and around the world, with electric vehicles and manufacturing automation. All of those things are happening right now, and because of that, demand is increasing.
Brian Amaral (Host)
And Brian, what were some of the major drivers of loss for power generation clients according to this report?
Brian Palmer
According to this report, the major loss drivers were gas turbines and transformers. It wasn’t just property damage causing the losses; it was also the time required to make repairs and obtain replacement parts and equipment. Lead times have increased significantly compared to even five years ago. Large utility-sized transformers can now take two to four years to replace after a failure. Gas turbines that previously took about a year to obtain can now take three to five years. With growing demand driven by electrification, everyone is competing for transformers, gas turbines, steam turbines, and generators. Clients seeking repairs are competing with organizations purchasing new equipment, all from the same OEMs that are trying to support aging fleets while manufacturing new assets.