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Green insurance must be price-competitive
Dr Gary Robertshaw
January 2011
We were pleased to hear that eco insurance company Naturesave Insurance has launched a new household insurance policy which covers domestic renewable energy installations. The Naturesave household renewable energy insurance policy was developed in recognition of the rising demand for home energy systems, arising from concerns about the environment and rising fuel prices.
Managing director Matthew Criddle said "Naturesave has been at the leading edge of ethical and environmental insurance for 15 years, and this new product is a natural addition to our household policy. We already give discounts to householders for energy saving measures in their homes and many of our existing household insurance clients currently have renewable energy systems installed. We are pleased to be able to include this additional cover and understand that it is the only product of its kind in the UK at the moment."
The announcement by Naturesave reflects a growing trend in more consumers demanding green, eco-friendly insurance products. Clearly, price will remain uppermost in consumers’ minds when buying insurance but policy benefits and the ethical stance of the insurer are also becoming deciding factors. The Green Insurance Company, Co-operative Insurance, Go Green Compare, ETA, Climatesure and more mainstream insurers such as HSBC now offer green insurance policies giving wider choice and competition in what was once a niche market.
Most consumers will be unwilling to pay a much higher premium for green insurance policies, as price is cited over and again as the deciding factor when buying insurance. For green insurance to enter the mass market it must be price-competitive and not simply seen as an expensive niche for eco-conscious consumers. That requires two measures. Firstly, specialist green insurance policies must be competitive. Secondly, and perhaps more importantly, existing large insurers must be encouraged to adapt their ethical and environmental policies. And that is likely to be driven by consumer demand rather than altruism.
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