green - Allianz Global Corporate & Specialty

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RISK FUTURES | 19

BACK TO GREEN A “GREEN CLAUSE” FOR PROPERTY COVERAGE PROVIDES A JOINT PLATFORM IN ORDER TO TACKLE CLIMATE CHANGE.

Remodeling or rebuilding structures can reduce their environmental impact —such as by installing solar panels.

By Thomas Paap

sure like coastal regions,” says Alexander B. Mueller, Global Head of Property Insurance at Allianz Global

GOING GREEN PAYS OFF

Corporate & Specialty (AGCS).

Green building minimizes consumption and effluence

ECOLOGICAL BUILDING To support activity among clients, AGCS recently began promoting the advancement of “green buildings”. Green buildings are built or remodeled according to environ-

12%

Water use

mental recommendations to improve air and water

30%

65%

Greenhouse Waste gas output emissions

70% Electricity consumption

quality, reduce solid waste and conserve natural resources. But they also provide economic benefits: reduced operating costs, enhanced asset value and prof-

Source: www.usgbc.org

its as well as improved employee productivity. To do this, the insurer has expanded its property cov-

tions for electric systems, heating and air conditioning

erage to include “certified green buildings coverage” and

systems. Plus, they go through a more rigid commission-

“green property upgrade coverage”. The former protects

ing process to assure that the systems have been

buildings that are green-certified, while the latter even

installed to manufacturers’ expectations. Aside from

covers those buildings that will be rebuilt to be environ-

better efficiency, AGCS expects a better insurance risk

mentally friendlier after a loss.

from such procedures. Commercial property losses fre-

Green clauses in insurance policies set environmen-

quently come from electric fires, heating and air condi-

tal standards or refer to environmental standards in local

tioning fires and plumbing leaks that arise when these

markets that are considered industry standards. “The key

infrastructure elements are not regularly renewed.

to this coverage is the upgrade element. After an insured

“Right now, we are working with AGCS units in local

suffers a loss, we want to direct customers to environ-

markets to identify standards, from building materials to

mentally friendly products,” says Sarah Heise, a property

the use of low-energy equipment,” says Mueller and

practice leader in the US market for AGCS.

adds: “Different regions have different awareness levels

This kind of cover was first pioneered at Allianz by

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Turn off your lights, use less heating, take public

electricity consumption and almost half of energy use,

Fireman’s Fund, an Allianz general insurance subsidiary

transportation, switch to energy-saving bulbs and

carbon dioxide (CO2) emissions and raw materials use in

in the United States. In 2007, Fireman’s Fund introduced

so on. By now, people are used to all the tips for saving the

the industrial world. But if loss events occur, these struc-

its “Green Building” program for commercial property,

environment, and many have decided to put in that extra

tures are often only covered to restore them to the level

and this summer green clauses were rolled out for

effort to combat global warming.

the law requires.

private homes. Going green, or better building green, is

Like most other industries, insurers are responding

advice above and beyond strict legal guidelines, and they

to global warming. They work to reduce not only their

are often eager to design their structures with the envi-

own “carbon footprint” but also that of their industrial

ronment in mind even if it means additional costs. After

clients. “We don’t want to limit our response by with-

all, studies show that office buildings account for 70% of

drawing from areas with increased wind or flood expo-

goal is to bring them to a global standard.”

ALEXANDER B. MUELLER Chief Underwriting Officer AGCS property [email protected]

rewarded by the company. Photo: Caro/Oberhäuser

Builders and businesses, too, are given much good

of climate change and what can be done to tackle it. Our

THOMAS PAAP AGCS property underwriting [email protected]

GOOD SENSE, BEST PRACTICE The approach also makes good business sense. Green buildings are designed with state-of-the-art specifica-

&

www.usgbc.org www.firemansfund.com/green

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