CFC Revolutionizes Carbon Insurance Market With New Product

CFC Revolutionizes Carbon Insurance Market With New Product - Carbon Herald

CFC, a leading insurance provider known for its expertise in niche markets and competence in the cyber insurance sector, has made its debut in the carbon insurance industry. 

The company introduced a revolutionary product called Carbon Delivery Insurance, which is the first of its kind to protect businesses from both the physical and political challenges associated with purchasing voluntary carbon credits in advance.

This innovative insurance covers the entire investment of the buyer in case the carbon credits are not delivered as promised.

The launch of this groundbreaking product marks a significant achievement in voluntary carbon market (VCM) development, as it addresses a crucial concern faced by businesses looking to offset their carbon footprint. 

Relevant: Kita Can Pay Insurance Claims In Cash And Replacement Carbon Credits

With CFC Carbon Delivery Insurance, companies can now have peace of mind knowing that they are protected against financial losses resulting from unforeseen events such as carbon credit invalidation or regulatory changes.

To better understand the demand for insurance on the VCM, CFC surveyed over 500 companies actively involved in carbon trading. 

The results were staggering: 75% of existing buyers are ‘very concerned’ about delivery shortfalls, while 65% have already experienced losses from non-delivery. Furthermore, 80% expressed a strong interest in purchasing underdelivery insurance. 

Even non-buyers expressed interest, with 50% stating they would be more likely to purchase voluntary carbon credits if they could insure them against non-delivery risk. 

Read more: CarbonPool Raises $12M For Novel Approach To Carbon Credits Insurance

Additionally, CFC has developed an advanced underwriting model that evaluates the carbon project instead of the policyholder, marking a new milestone for the company. This simplifies the purchasing process, enabling CFC to provide immediate quotes and coverage for buyers looking to purchase from their growing portfolio of over 300 carbon projects.

George Beattie, Head of Innovation at CFC, stated that insurance is the tool that allows all participants in the VCM to work together on their decarbonization initiatives with complete transparency. He added, “By facilitating risk transfer, we believe that insurers can drive positive change while getting ahead in a market whose value could exceed $1 trillion by 2050.”

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