â¯Turn off your lights, use less heating, take public transportation, switch to energy-saving bulbs and so on. By now,
18 | RISK FUTURES
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
❯
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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