against: About two years ago you started your ‘better-green’ insurance: climate-neutral claims settlement, but slightly higher premiums. Can you sum it up like that?
Henning Bernau: In fact, the ‘better green’ tariffs cost one to two percent more than our normal tariffs. But with this surcharge we simply finance the tree that we plant for each contract. In the general train of rising raw material prices, our costs for the trees have also increased. Besides, it is not enough just to plant them. Incidentally, we do this together with the state forests of the individual federal states. There you have the knowledge of what is important so that the tree is not over after two years. It needs a replanting guarantee, fencing, bite protection and an economic prohibition of exploitation for at least 50 years. If we tell you that we are planting trees to compensate for CO2 and after 30 years we are turning them into furniture wood, then that’s greenwashing.
against: How much do movements like Fridays for Future and the general interest of young people in climate protection issues affect your business at ‘bettergrün’? Or is that rather not your target group?
Bernau: In any case, we notice a lower cancellation rate among the ‘bettergrün’ customers. I guess that’s simply because these people took out our long-term insurance policies out of conviction and not switch to the next main due date because they can then save two euros. But we can also see it in the age of the customers: there are a lot of students. But we have just as many 40- and 60-year-olds who are taken along by the movement and who take out our policies in a subsequent step.
against: Do events that draw attention to climate change, for example a summer drought or the recent flood disaster, have a direct impact on the demand for your ‘better green’ policies, or do such events tend to have a long-term effect?
Bernau: Certainly you can see a small effect after a disaster. This can currently be seen very strongly in the elementary demand. The same applies to a lesser extent to our sustainable products. But that’s basically a different effect: the catastrophe then informs customers about sustainability and suddenly sees the possibility of taking out long-term insurance. So a more indirect link. So it’s more about the long-term effect. A long-term information campaign is required. The link between insurance and sustainability is currently relatively weak. This is different, for example, with green gas or green electricity. About 15 years ago there was little knowledge of such possibilities. I expect the same effect when it comes to sustainability in property insurance. If we were still laughed at in 2014, we will now be 100,000 within about two years. Cross the tree and we are still at the beginning.
2,000 euros extra for total write-offs
against: In addition to the additional element elementary – which policies are most in demand as ‘better green’ variants?
Bernau: The household goods sector in particular is picking up in the green area. In addition to the issues of ecological contribution and sustainable capital investment, the additional benefits in the event of damage are particularly important. The customer can see from striking examples how he can benefit from the sustainable variant even in the event of a claim.
against: Please give a few of these examples.
Bernau: In the case of a total write-off, the car insurance customer receives an extra 2,000 euros if he then purchases an electric or hydrogen vehicle. In household items and residential buildings: If the customer then improves their position and purchases the damaged devices in the highest energy efficiency class, we will cover up to 60 percent of the additional costs. This can also be a completely new heating system, which can quickly add up to a few thousand euros due to the additional performance.
against: How are your green policies being sold through brokers?
Bernau: Really really good. Of course, there are also some who don’t even mention it. You can see that immediately in the numbers. But with brokers who have once found access to these products, the green share of the policies brokered goes up sharply.
against: How can brokers locate and best address customers who are more interested in green?
Bernau: Just briefly test and ask. Here it is important to overcome your own inhibition threshold for this supposedly political issue. Actually, it usually makes sense not to address the customer about politics when advising them. But the topic of environmental protection is not a political one at all, but a social one in general. In any case, as a consultant, you can quickly determine whether the customer does not want to know anything about this topic or whether he is interested. And there are more and more. If we can still offer this ‘green’ insurance for the same price in the future, then everyone will have won. We want to get there.
against: What are your plans to increase the sales of ‘better green’ policies through brokers and broker pools?
Bernau: We have to support the brokers and pools in particular in addressing customers. We have to provide you with the materials of plantings, information about the forests, etc. simply and directly, so that they can be passed on to the customers. This creates the customer’s loyalty to the respective projects. It is one thing to bring sustainable insurance closer to the customer. But the aim must be to pick up the customer and inform him at regular intervals of what exactly he has already achieved with this insurance. In addition, we are open to numerous projects directly with brokers and pools. Be it to initiate your own forests or projects. As long as it is really sustainable, we can imagine anything.
against: As a hypothetical question: climate-neutral claims settlement, planting trees, investments according to ESG criteria – has this already reached the end of the flagpole or can insurance companies become even more sustainable? For example, through hard rules, such as a subscription freeze for SUVs in vehicles or new building insurances only for energy-saving houses?
Bernau: We don’t want to forbid anything with ‘better green’, but rather create the opportunity to get involved ecologically within the respective framework. If everyone only does what they can, we would be extremely far advanced. But it will also be a steady development. Anyone who is committed to sustainability, develops appropriate products and says, ‘That’s it’, is not really acting sustainably. It’s about constantly questioning one’s ecological efforts. That is also the exciting thing about bettergrün: We are developing from year to year. It starts with the respective insurance lines. With each new edition, we check our current status and talk to our sales partners about what we can make better and more sustainable. It continues with your own ecological footprint and that of the company to each individual ecological and social project. As I said: from my point of view, we are only at the beginning. In ten years’ time, ‘better green’ will no longer be comparable to today’s brand.
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