Munich Sustainability is also the topic of the moment in the insurance industry. Big providers are investing in wind and solar power, and talk a lot about their green systems. “But there is still no truly sustainable insurance,” Marie-Luise Meinhold is convinced. “A lot of things are still light green, if they are at all.”
Meinhold wants to do better with its Green business. There is already a first offer for bicycles. The product is still called “insurance”: insurance can only be sold if a license is available. This must be requested in the fall.
Starting next spring, for example, civil liability, home and accident insurance will be added, and from 2024 also commercial. “In the longer term, we want to achieve triple-digit million-dollar sales and expand the business to other European countries,” says Meinhold.
On the one hand, Verde wants to work as sustainably as possible. The company uses green electricity, the credit is with the social-ecological bank GLS, the employees travel by train or by bicycle.
best jobs of the day
Find the best jobs now and
be notified by email.
But the claim refers mainly to financial investments. Not only topics such as weapons or coal are excluded here. With all systems, positive social or ecological development must be achieved.
For example, Verde invested in the bond of the French region Ile-de-France. The money is used to finance biodiversity projects and the expansion of local transportation, for example. “Each project is shown individually in a transparent way how much CO2 is saved with it,” says Meinhold. Renewable energies and energy efficiency are also areas in which Verde wants to invest.
Top topic for the financial sector
The biologist and economist founded the company in 2017. The owner is a cooperative, the Verde eG. The first experiences with the protection of bicycles were obtained.
At least 3.5 million euros in own funds are now required for the insurance license. In a second round of financing, external investors such as family offices will now be included. “We want to raise 25 million euros by the end of September,” says Meinhold.
The moment is favourable. The issue of sustainable energy supply has become even more important as a result of the gas crisis. Also, from the beginning of August, brokers will have to ask customers about their sustainability preferences for the first products.
>> Read here: Your investment advisor will soon have to ask you these questions, and you’ll probably be very upset about it.
“We have a decisive advantage,” says Verde founder Meinhold. “We are the most credible because we invest sustainably from day one.” Others would restructure their stockpiles and are often only concerned with excluding certain topics, such as coal-fired power plants or cluster munitions. “We invest the money with the aim of generating a positive impact.”
We are the most credible because we invest sustainably from day one. Founder of Green Marie-Luise Meinhold
Interest in sustainability has increased significantly in the financial sector. It’s not just about increasing investor wealth, but also about a “social return, especially in view of the global climate crisis,” said Dagmar Nixdorf, who invests with Nixdorf Kapital AG in companies that have a lasting positive social impact.
According to current figures from Forum Nachhaltige Geldanlagen, which is supported by German fund houses Union Investment and Deka, among others, the market share of sustainable funds and mandates in Germany is now 9.4%.
Traditional insurers also focus on sustainability
The curve points strongly upwards. Thus, sustainable investments by private investors have more than tripled to €131 billion in 2021. Institutional investors showed a 26 percent increase to €233 billion.
Classic insurers have long since discovered the issue for themselves. Last year, the General Association of the German Insurance Industry presented a sustainability report for the first time. “Around 80 percent of investments held directly or indirectly are already invested in accordance with ESG criteria,” said CEO Jörg Asmussen.
Ultimately, we believe that sustainability and inclusion are the best way to realize our potential for growth and value creation. Allianz boss Oliver Bäte
Therefore, the environment (environment), social (social) and good corporate governance (governance) must be taken into account. According to the association, almost all insurers also work with negative lists: about 88 percent, for example, exclude coal-related capital investments.
Industry leader Allianz has also declared sustainability a corporate principle. “Ultimately, we believe that sustainability and inclusion are the best way to realize our potential for growth and value creation,” said CEO Oliver Bäte. Allianz wants to “contribute to a more sustainable future for the world and the societies in which we live and work”. Allianz estimates investments in this area at 123,000 million euros.
Verde wants to go beyond investing according to ESG criteria. In terms of impact investing, you pay very specific attention to what the investments actually finance and disclose the result in full detail on your own website. Impact investing is “generally considered one of the strictest methods of sustainable investing,” says Meinhold.
The financial market as a power factor in the ecological transformation
The founder is convinced that insurance companies in particular can make a much larger contribution. The monetary and financial market is a power factor that will decide if, for example, the transformation in the fight against climate change will be successful. “Many underestimate leverage,” he said.
For example, an investor could allocate 25 million euros directly to the generation of renewable energies. In the case of an insurance policy, the clients’ resources would add another 100 million euros to the same amount. “Then you can do well with 125 million euros.”
The firm has developed an “impact matrix” to help identify investment properties where the greatest impact can be achieved. Of course, the return still has to be correct. However, studies have shown that sustainable investments often yield even higher returns.
Verde also wants to keep up with the competition when it comes to the prices of insurance products. “We won’t be the cheapest, but we won’t be the most expensive either,” says Meinhold. If the products are accepted in the market, it also wants to enter the market for longer-term life and health insurance. Because the higher the premium income, the higher the leverage for social impact.
Plus: Green investment advice threatens to overwhelm providers and investors.