Munich Sustainability is also the topic of the hour in the insurance industry. The big providers are investing in wind and solar energy – and they talk a lot about their green systems. “But there is no really sustainable insurance yet,” Marie-Luise Meinhold is convinced. “A lot of things are still light green – if at all.”
Meinhold wants to do better with her company Verde. A first offer for bicycles already exists. The product is still called “insurance” – insurance may only be sold if a license is available. This should be applied for in the fall.
From next spring, for example, liability, household and accident insurance and from 2024 also commercial policies will be added. “In the longer term, we want to achieve three-digit million sales and expand the business to other European countries,” says Meinhold.
On the one hand, Verde wants to work as sustainably as possible itself. The company uses green electricity, the credit is with the social-ecological GLS Bank, the employees travel by train or bicycle.
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But the claim relates primarily to the financial investments. Not only topics such as weapons or coal are excluded here. With all systems, a positive social or ecological development should 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 transport, for example. “Every project is transparently shown individually 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. First experiences were gained with bicycle protection.
At least 3.5 million euros in equity are now required for the insurance license. In a second round of financing, external investors such as family offices are now to be included. “We want to raise 25 million euros by the end of September,” says Meinhold.
The timing is favourable. The topic of sustainable energy supply has become even more important as a result of the gas crisis. In addition, 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 will probably be very annoyed about it
“We have a decisive head start,” says Verde founder Meinhold. “We are the most credible because we invest sustainably from day one.” Others would restructure their depots and they are often only concerned with excluding certain topics such as coal-fired power plants or cluster munitions. “We invest the money with the goal of making a positive impact.”
We are the most credible because we invest sustainably from day one. Verde founder Marie-Luise Meinhold
Interest in sustainability has increased significantly in the financial sector. It’s not just about increasing the wealth of investors, 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 sustainable positive social impact unfold.
According to current figures from the Forum Nachhaltige Geldanlagen, which is supported by the German fund houses Union Investment and Deka, among others, the market share of sustainable funds and mandates in Germany is now 9.4 percent.
Traditional insurers also focus on sustainability
The curve points strongly upwards. The sustainable investments of private investors have therefore more than tripled to 131 billion euros in 2021. Institutional investors showed an increase of 26 percent to 233 billion euros.
The classic insurers have long since discovered the topic for themselves. Last year, the General Association of the German Insurance Industry presented a sustainability report for the first time. “Around 80 percent of the investments held directly or indirectly are already invested according to ESG criteria,” said Managing Director Jörg Asmussen.
Ultimately, we believe that sustainability and inclusion is the best way to realize our potential for growth and value creation. Allianz boss Oliver Bäte
The environment (environment), social (social) and good corporate governance (governance) should therefore be taken into account. According to the association, almost all insurers also work with negative lists: around 88 percent, for example, exclude capital investments related to coal.
Industry leader Allianz has also declared sustainability to be 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 billion euros.
Verde wants to go beyond investing according to ESG criteria. In terms of impact investing, you pay very specific attention to what is actually financed with the investments and disclose the result in all details on your own website. Impact investing is “generally considered one of the strictest methods of sustainable investment,” says Meinhold.
Financial market as a power factor in ecological transformation
The founder is convinced that insurance companies in particular can make a much larger contribution. The money and financial market is a power factor that will decide whether, for example, the transformation in the fight against climate change will succeed. “Many underestimate leverage,” she said.
For example, an investor could put 25 million euros directly into the generation of renewable energies. In the case of an insurance policy, customer funds would add another 100 million euros to the same amount. “Then you can do good with 125 million euros.”
The company 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 right. 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 for insurance products. “We won’t be the cheapest, but we won’t be the most expensive either,” says Meinhold. If the products are accepted on the market, it also wants to enter the life and health insurance market in the longer term. Because the higher the premium income, the greater the leverage for the social impact.
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