Sustainable insurance solutions

Posted: 12 February 2020

The 25th climate conference (COP25) in December saw over 25,000 politicians and experts from 190 countries gather to discuss the pressing issue of climate change. With greenhouse gas concentrations reaching record levels1, UN Secretary António Guterres even spoke of ‘the point of no return’ for the planet.

Sustainability is high on most corporate agendas, with companies under pressure to identify methods to reduce their environmental footprint, plus develop more eco-friendly products and solutions. The insurance industry is no different; in 2017, ClimateWise reported a climate risk protection gap of US$1.7trn caused by years of extreme weather and called upon the industry to explore ways to address this.

Opportunities for insurers exist not just through proposition development but also through the claims lifecycle. Recent initiatives in the claims process have explored repair techniques rather than replacement across multiple lines of business, including property and motor.  This has the joint advantage of reducing waste sent to landfill and limiting the strain placed on natural resources for the sourcing and/or production of new parts.


In the commercial property space, the expertise of specialist restoration companies can be leveraged for engineered surface damage repairs on a variety of items, from wooden surfaces to UPVC windows. Allianz has partnered with one such company, Plastic Surgeon, who reported that “of all cases presented to them, only 16% of items were unrepairable”.2 This process has the further benefit of achieving cost and time efficiencies in the claims settlement process.

Another example, this time across motor lines, is the use of ‘green parts’ (undamaged, reusable components from end-of-life vehicles) for certain insurer-funded motor repairs. Once viewed distrustfully as inferior, attitudes to green parts are now becoming favourable, with the knowledge that they are sourced from equivalent vehicles and from an original equipment manufacturer (OEM), so the provenance can be clearly tracked. Since these parts are only used with the vehicle owner’s full consent and are subject to careful inspection and grading, policyholders can be reassured of no difference in performance or appearance. Opting for a green part over a brand new replacement may even speed up the repair process, with repairers often able to source readily available parts rather than rely on international supply chains. This may become even more pertinent depending on the outcome of Brexit and its impact on frictionless trade.

Emerging trends, such as electric and autonomous cars, plus connected home devices are also contributing to a more sustainable future. There is much more to do but insurers are paving the way for customers to be able to make greener, more sustainable choices at work and at home. 

This article was originally published in Modern Insurance Magazine (Issue 42). It may not be replicated in any other publications.
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