Lloyd's of London has announced it will expand its insurance coverage to better support the "greener energy sector" and create new insurance products for electric vehicles (EVs), as part of an effort to drive progress towards a more sustainable economy.
The insurance giant made the announcement in a climate action plan published in late July, which sets out how it plans to work in the short- and long-term to help various industries transition to net-zero emissions.
Alongside extending its insurance coverage to emerging green businesses and infrastructure, the insurer said it would create new "risk transfer solutions" that support green innovation and renewable energy investment and expansion. It also committed to create a public-private disaster resilience, response and recovery framework geared at assisting nations that are particularly vulnerable to the economic and societal impacts of climate change.
In addition, Lloyd's said it would focus on de-risking critical decarbonization activities, closing protection gaps and acting as a facilitator to catalyze action across industry, customers, government and other key stakeholders.
Many actions set out in the strategy will be delivered through the Sustainable Markets Initiative Insurance Task Force, a coalition of major insurers chaired by Lloyd's that was launched last month by the Prince of Wales.
Green business leaders have long argued that better tailored insurance policies could help accelerate the roll out of low carbon infrastructure.
Bruce Carnegie-Bown, chair of Lloyd's and the SMI Insurance Task Force, emphasized an urgent need for all industries to drive "monumental transformation" required to tackle climate change.
"Lloyd's is proud to play a role, together with the global insurance industry, in partnering with sectors to provide the risk management solutions and investment that will help enable and accelerate the necessary changes and drive action towards a more sustainable world," he said.
The firm published its climate road map alongside a broader report dubbed "Insuring a sustainable, greener future," which explores how the insurance sector can help drive the net-zero transition.
The announcements from Lloyd's comes just a few weeks after major insurers teamed up to launch a major net-zero alliance for the sector, the Net Zero Insurance Alliance.
Green business leaders have long argued that better-tailored insurance policies could help accelerate the roll out of low carbon infrastructure, warning that conventional policies often fail to account for the specific risks clean technologies face or demand high premiums due to the relatively new nature of many green projects or products. For example, electric vehicle drivers have complained of facing relatively high premiums for insurance, despite evidence zero-emission vehicles are more reliable than internal combustion engine cars.