Going "green"

Climate change is a threat to our traditional business base," explains Martin Gansneder of Allianz Climate Solutions, a subsidiary that has been the think-tank and initiator of Allianz "green" investment and insurance strategy since 2007. "Climate change increases the frequency and severity of storms and changes the character of the seasons. We are already seeing higher loss ratios in property insurance."

However, this is only half of the explanation why Allianz companies all over the world are starting to create "green" product solutions. "What we see currently is a new demand for energy efficiency in buildings or cars," explains Gansneder. "And this gives us a chance to tap into new business fields and enable growth and profit in otherwise saturated markets."

In the build-up to the Copenhagen climate conference at the end of 2009, Allianz Climate Solutions and Group Communications set out to gather a complete list of all climate-related products and services offered by Allianz companies. By November, more than 50 products from all over the world were identified, ranging from private or corporate solutions in motor, home and property insurance, to asset management products and assistance services. All have a "green" component, which is either an incentive or reward for "greener" behavior, insurance coverage for climate-related losses, specialist consultancy or investment in sustainable and "green" funds and activities.

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"What is really positive is that Allianz companies all over the world – more or less unrelated to each other – have started to address climate change on a very practical and hands-on level," says Gansneder. The subsidiaries that offer "green" products are geographically and economically as far apart as Australia, Russia, the US, Brazil or Turkey. In the definition of Allianz Climate Solutions, "green" products are beneficial for the customer, for Allianz and for the environment alike. The companies, on a local level, are translating this into concrete business cases and solutions. A French example: Mondial Assistance France offers a consultancy program that supports private homeowners to undertake energy efficiency renovations for their residential building. The program involves four services: the diagnosis of the home's energy performance, advice and simulation of possible renovations and costs, support to prioritize renovation works and an assessment of the CO2 savings after the renovations are done.

With this service Mondial in France enters into a new business field and actively contributes to a low carbon society. Since energy efficient buildings are considered to have a lower loss ratio, it is additionally a positive impact for Allianz's insurance risk exposure. US subsidiary Fireman's Fund has been a trailblazer in this field too. In 2006, the company launched its first "green" product, followed by five more in 2008 and 2009. The solutions range from green building support and hybrid auto incentives to manufacturers' green property solutions and green commercial risk management. "What we do today will affect future generations," points out CEO Michael LaRocco.

More climate-friendly products and solutions are in the pipeline. In February, Allianz Climate  Solutions held a "green" products workshop with four Allianz companies from the core European markets. Beside that it is supporting many entities in starting or improving their climate friendly portfolios. "While we welcome all the incentives by the businesses, we especially support the more complex and sustainable products," says Gansneder. "We want to show that green products are profitable and I am convinced that they soon will outgrow their niche markets."

This article first appeared in the employee magazine "Allianz Journal".

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