Carbon neutral insurance

As the issues of climate change and corporate environmental responsibility continue to take center stage, more and more insurers are offering products that appeal to the eco-friendly consumer.

Overall insurers' attempts to introduce environmentally friendly products have rewarded ingenuity and focused on discounts to energy efficient customers while contributing to carbon offsetting organizations.

Several UK insurers and brokers have begun offering their customers financial incentives to go green. Most recently, broker RK Shipman announced that customers placing home insurance through the Essex-based intermediary would have their personal household carbon emissions offset.

In January of this year, Aviva said it would be investing in projects which generate carbon credits. This was followed, in April, by Royal & SunAlliance’s launch of two green insurance products: a GPS technology that helps people drive in a greener way and an eco-discount of up to 15%.

Bridget McIntyre, UK chief executive of Royal & SunAlliance, said: “Our customers want us to take action, and our people want to work for a company that's taking its environmental responsibilities seriously.”

Richard Harvey, group chief executive, Aviva said: “We believe climate change to be the most important environmental issue facing the world and as a forward thinking company we are playing our part in addressing this challenge.”

“Though the UK has only 1% of the world's population it accounts for 2% of world emissions.

Labour MP Michael Meacher

It’s perhaps no surprise that the insurance industry is taking the issue seriously, as it’s likely to be left footing the bills if climate change brings in its wake more extreme and destructive weather. Meanwhile the companies in which insurers invest could become adversely affected by these events.

A recent UN report produced a disturbing message that economic losses due to climate change could reach $1trillion in a single year by 2040.

On the other hand, it could be said that insurers are jumping on the ethical bandwagon in the hope that they will be rewarded with the title of good corporate citizens.

Cries of profiteering are not unheard of either. Recent research from price comparison site moneysupermarket.com said that eco-friendly consumers were being hit hard by premiums hiked up to 44% over standard policies.

Offering financial incentives for customers who adopt eco-friendly initiatives is to be applauded. But it remains to be seen if the industry is walking the walk as well as talking the talk.