The Green Energy Transition: Seizing the Opportunity -

For insurers the Net Zero and Climate activism which has colonised much of modern political party & public sector policy in Europe, North America and Australasia offers a huge opportunity.

New infrastructure, often featuring new tech, offers large scale risks and rewards. The switch from petrol/diesel to battery cars, both fleet and private. Greener marine cargo, with hybrid shipping and AI/robot enabled port services and goods distribution. The replacement of dairy and arable food production with onshore locations for solar and wind power – this will change rural insurance forever.

Add on new carbon credit trading online, NGO and govt backed contracts to the private sector in complex partnership deals too. These are the new frontiers of digital, reputational and director liability, cyber security and payments transfers – this process all needs insurance to work at scale.

So insurers are right to set up bespoke sub-brands or companies to specialise in certain aspects of what is called the `green economy’ by politicians. The struggle that existing motor insurance brands are having to quote, repair and salvage EV vehicles highlights how an infrastructure designed for 20th century vehicles is failing to adapt to pure battery cars and all their risks, challenges and typical lease user profile. Owners are being replaced by renters as regards cars, so really insurers need to rethink their model from the ground up, built around a rented lifestyle – the risk isn’t the vehicle itself, it’s the convenience of personal transport on demand.

Furthermore, they have a regulatory obligation to channel investments like pension contributions into green tech, low carbon, non oil projects. In the end that means a new set of financial instruments and product lines that offer investors a chance to place a stake in the future and – maybe – make a profit long term.

So here’s the latest news from Allianz who are offering a new solution for clients who want to invest in the long term transition to a de-industrialised, low carbon economic model.

Allianz Trade introduces Surety Green2Green, a bold new solution aimed at accelerating the sustainable transition of the global economy. Through this product, Allianz Trade enables its clients to engage in low-carbon technologies and renewables projects through issuance of surety bonds and guarantees securing their proper completion. But the company takes it one step further: the amount of premiums received are then held as investments in certified green bonds , creating a circular model that continually fuels sustainability progress.

A step forward in Allianz Trade’s sustainability journey

Building on years of commitment to sustainability, Surety Green2Green is a testament to Allianz Trade’s leadership in driving the transition. Aligned with its parent company, Allianz Group, the company has made sustainability a core component of its business strategy and operations. The launch of this product marks another milestone in Allianz Trade’s efforts to align financial security with sustainability principles.

“As an insurer and global trade enabler, we are uniquely positioned to help companies and the overall economy to grow in a more sustainable way. This is why we aim to lead by example and reduce the carbon footprint of our own operations. This is why we aim to infuse a sustainable mindset at all stages of our organization. This is why we aim to steer the decarbonization of our portfolios. And eventually, this is why we aim to launch innovative and sustainable solutions that foster a low-carbon transition”, describes Piril Kadibesegil Yasar, Head of Sustainability at Allianz Trade.

Supporting the breakthrough of low-carbon technologies and renewables

A surety bond supports and secures the contractual obligations a company has entered into with a customer, supplier, or public organisation. Therefore, as a surety specialist, Allianz Trade financially protects its clients’ business partners against any loss occurring due to late or incomplete performance of obligations. Surety Green2Green follows the same logic: without surety bonds, many sustainable projects would face significant financial risks and legal barriers, and even not come to life.

“The process is straightforward. Once a project aligned with our low-carbon technology standards is identified, it goes through a rigorous assessment led by our sustainability experts. If it meets our criteria, the premiums we earn from this transaction are then held as investments in certified green bonds. This way, we create a full-circle benefit: we issue bonds that ensure low-carbon project’s success, and we fuel the sustainable transition of the overall economy. Our parent company, Allianz Group, has certified this solution as a sustainable one , demonstrating its expected positive impact”, explains Soenke Schottmayer, Head of Commercial – Global Surety at Allianz Trade.

From renewable energy power and heat generation to carbon removal and green buildings, Allianz Trade’s surety bonds are already making an impact. In Germany, they support a major power line project poised to deliver energy to over 2 million people. With the launch of Surety Green2Green, Allianz Trade aims to duplicate this approach and enhance its capabilities to support such projects.

Allianz Trade scales its expertise to shape a more sustainable future

Allianz Trade’s vision for Surety Green2Green is clear: support and secure the technologies and infrastructures necessary for a sustainable future while contributing to the green finance ecosystem. This approach is nothing new for Allianz Trade and might soon be scaled on other business lines.

“With Surety Green2Green, we scale our knowledge, and we leverage on our expertise. This solution follows in the footsteps of our similar solution in specialty credit, launched in 2020 and granting specific coverage for around 50 projects all around the world. I am convinced that both of these will prove their value for the sustainable transition in the years to come. We also shape a more sustainable economic growth. What we do in this matter, as an insurer, is crucial: by providing insurance and bonds for technologies which are critical for the transition and decarbonization of our economy, we offer the confidence and support necessary for these initiatives to succeed”, ends Aylin Somersan Coqui, CEO of Allianz Trade.