Insurers are helping companies go green

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While going green is an attractive prospect, the costs can be an exceptionally successful deterrent. The technology may save money in the long run, but what if it breaks in two years? However, homeowners, entrepreneurs, companies and consumers are receiving assistance from an unexpected source – insurers.

Increasingly, insurance companies have been helping individuals act on their good intentions. According to the New York Times, insurers are backstopping warranties on solar panels and helping green startup companies offer multi-decade warranties for their products to attract investors.

They are also helping existing corporations make the move to renewable energy systems and paying those whose operations are affected by storms or fires to rebuild them along more environmentally-conscious lines. Insurers worldwide are even offering coverage to participants in carbon trading programs.

As more and more corporations are seeing the financial benefits of going green, some may believe that is reason enough for insurers to enter the industry, the paper reports. Yet Dr. Nikolaus von Bomhard, chief executive of Munich Re, says that insurers could accelerate the manufacturing and deployment of green technology by assessing, quantifying and spreading risk.

With more companies investing in the manufacture of green products, Jim Tynion, a partner at the law firm Foley & Lardner and chairman of its energy practice, predicts that in the next five years, this segment of the business will "explode," the Times writes.

“The Chinese and other manufacturers from around the world want to come to the U.S. market, but many don’t have a history or a credit standing … They don’t have a warranty claims process in the U.S. – if something breaks, who do you call?” Tynion told the Times.

Since 2009, Munich Re has guaranteed eight solar panel manufacturers. Recently, the company defied economists’ expectations and posted a 19.7 percent increase in investments during the second quarter, Bloomberg writes. This year the company dealt with a January to June period fraught with disasters, such as the earthquake in Chile and the Deepwater Horizon oil spill.

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