Permanent Insurance: Verde is applying for an insurance license

Munich Sustainability is also a hot topic in the insurance industry. Big suppliers are investing in wind and solar energy – and they talk a lot about their green systems. “But there is no really lasting insurance yet,” believes Marie-Luise Meinhold. “A lot of things are still bright green – if at all.”

Meinhold wants to do better with its Verde company. The first offer for bicycles already exists. The product is still referred to as “insurance” – insurance can only be sold if you have a license. This should be applied for in the fall.

From the spring of next year, among others, civil liability, housing and accident insurance, and from 2024 also commercial policies. “In the long term, we want to achieve triple-digit sales in the millions and expand 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 loan is in the socio-ecological GLS Bank, the employees travel by train or bicycle.

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But the claim is primarily for financial investments. Not only topics such as weapons or coal are excluded here. Positive social or ecological development must be achieved with all systems.

For example, Verde has invested in bonds in the French Ile-de-France region. The money is used, for example, to finance biodiversity and local transport development projects. “Each project is clearly shown individually how much CO2 can be saved with it,” says Meinhold. Renewable energies and energy efficiency are also areas where Verde wants to invest.

Top topic for the financial sector

A biologist and economist founded the company in 2017. The owner is the Verde eG cooperative. The first experiences were gained with bicycle protection.

At least EUR 3.5 million of capital is now required to obtain an insurance license. Outside investors such as family offices are now to be included in the second round of financing. “We want to raise EUR 25 million by the end of September,” says Meinhold.

Time is right. The topic of sustainable energy supplies has gained even greater importance as a result of the gas crisis. In addition, from the beginning of August, brokers will have to ask clients about their sustainability preferences for their first products.

>> Read here: Your investment advisor will soon have to ask you these questions – and will likely get very irritated by it

“We have a decisive start,” says Verde founder Meinhold. “We are the most reliable because we invest sustainably from day one.” Others would restructure their squads and are often only concerned with the exclusion of certain topics such as coal-fired power plants or cluster munitions. “We invest money to make a positive impact.”

We are the most reliable because we invest sustainably from day one. Founder of Verde Marie-Luise Meinhold

Interest in sustainable development has grown significantly in the financial sector. It is not only about increasing investor wealth, but also about “the social return – especially in the face of the global climate crisis,” said Dagmar Nixdorf, who, together with Nixdorf Kapital AG, invests in companies that have a lasting positive social impact.

According to the current data from the Nachhaltige Geldanlagen Forum, supported, among others, by by the German funds Union Investment and Deka, the market share of sustainable funds and seats in Germany is currently 9.4 percent.

Traditional insurers also focus on sustainable development

The curve points strongly upwards. Sustainable private investment has therefore more than tripled to € 131 billion in 2021. Institutional investors showed an increase of 26%. up to 233 billion euros.

Classic insurers have long discovered this topic for themselves. Last year, the General Association of the German Insurance Industry presented a sustainability report for the first time. “About 80 percent of investments directly or indirectly held are already invested according to ESG criteria,” said managing director Jörg Asmussen.

Ultimately, we believe that sustainable development and integration is the best way to realize our potential for growth and value creation. Head of Allianz Oliver Bäte

It is therefore important to consider the environment (environment), social (social) issues and good corporate governance (governance). According to the association, almost all insurers also work with negative letters: e.g. excludes equity investments related to coal.

The industry leader, Allianz, also declared that sustainable development is a corporate principle. “Ultimately, we believe that sustainable development and integration are the best way to realize our growth and value creation potential,” 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 EUR 123 billion.

Verde wants to go beyond ESG investing. When it comes to influencing investments, you pay close attention to what is actually financed by the investment and disclose the result in all detail on your own website. Influential investing is “generally considered to be one of the strictest methods of sustainable investing,” says Meinhold.

The financial market as a factor of strength in the ecological transformation

The founder is convinced that insurance companies in particular can make a much greater contribution. The money and financial market is a force factor that will determine whether, for example, the transformation in the fight against climate change will be successful. “Many underestimate leverage,” she said.

For example, an investor could directly allocate EUR 25 million to producing renewable energy. In the case of an insurance policy, customer funds would add another € 100 million to the same amount. “Then you can do well for EUR 125 million.”

The company has developed an ‘impact matrix’ to help identify the investment properties on which you can achieve the greatest impact. Of course, the return still has to be correct. However, research has shown that sustainable investments often pay 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 neither will we be the most expensive,” says Meinhold. If the products are accepted on the market, it also wants to enter the life and health insurance market in the long run. Because the higher the premium income, the greater the leverage for social impact.

More: Green investment advice risks overwhelming suppliers and investors.

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