Turning Setbacks into Strengths: Allianz Commercial's Path to Sustainable Recovery

For Allianz Commercial, the question is: can the claims process itself become a trigger for clients to make their assets better? We want clients to get back on their feet financially, but also to come out stronger. If we can help them replace “like for better,” rather than just “like for like,” we are doing more than paying a claim – we are helping them think about the future, decarbonize their assets and build a more sustainable business. It turns a negative event into an opportunity – and positions Allianz as a partner that enables clients who want to be better prepared for the future.

We’re launching Build Back Better sector-by-sector because insurance is highly technical and specific to each line of business. What works in marine insurance may not apply to construction. The risks, technologies and policies vary significantly, and so do the opportunities to make upgrades. That is why we tailor the endorsement to the technologies and risk profiles of each sector.

Take marine insurance, for example. For shipowners, efficiency gains come from the energy system, propulsion systems or even the coatings on a vessel’s hull. Improvements in these areas reduce fuel use, which in turn cuts greenhouse gas emissions, particularly CO₂. That makes them a good fit for a Build Back Better product.

Of course. The Marine Build Back Better Endorsement offers up to EUR/USD 1 million in extra cover to repair or replace damaged parts with lower-carbon options. The payout is a sublimit, capped at 25% of either the original loss or the additional cost – whichever is lower.

To qualify, the upgrade must deliver at least a 2.5% improvement – whether that is in fuel efficiency, emissions reduction or a mix of both. In real terms, that might mean fitting a more efficient propulsion system, upgrading a cooling unit or using advanced hull coatings that cut drag and reduce fuel burn.

We chose these areas because the improvements are measurable. That matters in insurance – contracts need to be clear about what does and doesn’t qualify. By sticking to upgrades we can verify, we make sure the endorsement is practical and transparent for clients.

Green steel is a practical win-win. Green steel delivers at least a 25% reduction in carbon footprint compared with conventional steel, while the final product itself remains the same – just made more cleanly. From a risk perspective, that makes it straightforward.

Other materials, such as experimental low-carbon concrete or mass timber, are exciting but pose challenges because they are newer and change the properties of the final structure. As insurers, we need more data before we can confidently cover those. Green steel means big carbon savings, with no new risks for insurers or builders. It’s about picking solutions that are both effective and insurable and that let us support clients right now without taking on unknown risks.

Once clients understand the idea, the interest is strong. The main challenge is who we talk to. Our day-to-day contacts are risk managers, but decisions on sustainability often sit with different people in the company. That creates a gap.

So, we work to bring the right people together and show why these endorsements matter – financially, practically, and reputationally. And when we do, clients see the value. As a result, uptake has been steady rather than fast, because that’s the way the insurance world is structured. Our task is to streamline the process, so it becomes easier to access.

Natural catastrophes destroy physical assets: buildings, factories, infrastructure, ships. That’s exactly where Build Back Better can make a difference.

Take our North America property endorsement. When a client suffers NatCat damage, the endorsement encourages them to rebuild to higher efficiency standards. We’re also exploring how to support resilience measures, like better flood defenses.

The complexity lies in balancing fairness between fair indemnity and betterment. Insurance is meant to restore what was lost, not pay for an upgrade a client already planned. We want to help strengthen resilience, but we must do it in a way that is fair to everyone in the risk pool.

Governments are often needed in this space. In the UK, for example, the Flood Re programme ensures households in high-risk areas can access flood insurance, with costs shared across the market. Similar discussions are happening in Germany about mandatory flood insurance. These approaches recognize that some risks are so systemic, so society as a whole must share the burden.

We see it as a marathon, not a sprint. Insurance usually works in one-year cycles, but increasingly, climate risks do not fit that rhythm. We’re building the foundation now – gathering data, refining pricing models, testing products. Ten years from now, those efforts will shape stronger solutions.

The key is that climate change is increasing risk: more property damage, more business interruption, more claims. For insurers, that’s a clear signal. We can’t solve climate change alone, but we can help clients take small, meaningful steps that reduce risk and emissions together.

I see it becoming part of a wider system where businesses, governments and insurers work hand in hand. Some risks, like flooding, are too big for the private sector to handle alone. Government backstops, like in the UK, will be essential.

Build Back Better is one tool in that system. It ensures that recovery from disasters doesn’t just patch things up but makes them stronger for the future. In a way, it’s like planting oak trees you’ll never sit under. We’re laying the groundwork today to ensure that the types of businesses which contribute to economic stability, that many of us take for granted today, continue to thrive for future generations.