Zhong'an Financial Technology Research Institute released a report: digital technology enables green insurance innovation and development

On January 14, Zhong'an Financial Technology Research Institute and Xinhua News Agency quick look jointly issued a green insurance report, proposing that insurance, as an important part of the market-oriented carbon emission control mechanism, will realize the comprehensive green transformation of economic and social development at a lower social cost.

The target time of "3060" and "double carbon" is tight and the task is heavy. The report of "insurance carbon neutralization series report II: green insurance products in the low-carbon era" (hereinafter referred to as the report) believes that a series of digital communication technologies such as sensors, 5g and artificial intelligence are changing the way of energy use and consumption in the social economy, and the interconnection of industries and infrastructure has laid the foundation for high-quality innovation and development of green insurance.

Wang Min, executive deputy general manager of Zhong'an insurance, said that for green insurance, on the one hand, insurance companies must use emerging technologies to improve the accuracy and scalability of risk pricing of underwriting solutions. On the other hand, they need to actively establish partnerships to deal with the risk management challenges brought by green transformation and help insurance customers grasp the development opportunities of green economy.

digital technology helps the development of green insurance

At present, the transformation of economy to green and low-carbon has become a general consensus of the international community. The rapid development of green economy will be an inevitable trend in the medium and long term of the global economy. In the process of coping with climate change and economic transition to low carbon, risk management also faces new challenges.

The report believes that insurance is one of the important participants in market-oriented carbon emission governance. Through innovative insurance products and services, it can realize the comprehensive green transformation of economic and social development at a lower social cost. At present, all sectors of the industry have paid attention to the unique leverage of green insurance in promoting low-carbon transformation and providing risk protection.

In recent years, the development achievements of China's green insurance have initially appeared, but there is still a large gap compared with the security demand for green and low-carbon transformation of economy and society. We need to continue to make efforts in product supply, security coverage breadth and depth, risk data accumulation, innovation and incentive mechanism, etc.

The report believes that science and technology will be the breaking point for accelerating the realization of the "double carbon" goal and the accelerated development of green insurance. Digital communication technologies such as sensors, 5g and artificial intelligence are changing the way of energy use and consumption in social economy. At the same time, the accumulation of relevant industrial practices and the interconnection of infrastructure have laid a foundation for commercial insurance R & D and innovation of green insurance products or services.

It has been proved that technological and digital innovation in the field of micro insurance can provide basic protection for more vulnerable groups. This includes the use of UAVs, sensors, intelligent image recognition technology and so on. The application in distribution, underwriting, underwriting and claim settlement can improve the sense of acquisition and well-being of green insurance to a certain extent, which deserves the key attention of the industry.

Wang Min believes that the adoption of new technologies must be accompanied by systematic changes. Any new solution must consider the complexity of interdependence among various subjects. Insurance companies need to cooperate with multiple parties to jointly study climate risks and actively build and maintain a communication platform with public sector institutions, enterprises, academia, non-governmental organizations and citizens, Collaborative development to provide customers with innovative solutions.

new energy vehicle insurance leveraging traffic emission reduction

More than 70% of the carbon emissions of the global transportation sector come from road vehicles, and new energy vehicles are an important starting point for traffic carbon reduction. Goldman Sachs estimates that the penetration rate of new energy vehicles in China's total road transport vehicles will reach 20% by 2030 and close to 70% by 2040.

The report believes that the rapid transformation of the new energy vehicle industry will have a far-reaching impact on the auto insurance industry. The application of technologies such as intelligent Internet connected vehicles and cloud platform big data enables insurance companies, especially emerging Internet insurance enterprises, to establish digital advantages, innovate and develop new energy vehicle insurance products and services with characteristics, and layout the whole business chain.

The intelligent characteristics of new energy vehicles will help insurance companies establish insurance product pricing models including driving mileage, residual power SOC, charging behavior and other factors. In terms of underwriting, vehicle dynamic factors such as mileage will have a great impact on the residual value evaluation of vehicles. In terms of product innovation, through the positive feedback of users, iterative products can be improved in time and more personalized services can be brought.

In December last year, the China Insurance Industry Association officially issued the exclusive provisions of the China Insurance Industry Association for commercial insurance of new energy vehicles (Trial), which clearly included the fire combustion, power grid failure and charging pile related to the "three electricity" system and new energy vehicle power into the insurance coverage, and clarified the deductible liability. Exclusive terms will effectively promote the healthy development of new energy vehicle insurance market.

However, the division of labor and coordination of the financial value chain of new energy vehicles, including OEMs, insurance companies and battery manufacturers, still need to be constructed and improved, the data interconnection mechanism between them still needs to be constructed, and the experience of insurance companies in the design and pricing of new energy vehicle related insurance products still needs to be accumulated.

The report suggests that insurance companies, battery manufacturers, main engine manufacturers and other value chain entities should take joint action to promote all parties to work together to obtain better development opportunities under the general trend of low-carbon travel by launching industry initiatives or formulating industry standards by relevant regulatory authorities or industry associations.

climate and green building insurance stabilize the risk of low-carbon transformation

In recent years, due to climate change, urbanization and other reasons, the economic losses caused by global meteorological disasters are on the rise. From 2013 to 2020, there were 6 catastrophic loss accidents of more than 1 billion yuan in China, and the single largest typhoon loss reached 3.6 billion yuan. Facing the threat of natural disasters, weather index insurance and catastrophe index insurance play an irreplaceable role.

Since 2014, China has tried to arrange catastrophe insurance to provide economic compensation for huge property losses and serious casualties caused by natural disasters such as earthquake, hurricane, tsunami and flood. In addition, precipitation and temperature weather index insurance, solar radiation power generation and wind power generation index insurance for clean energy power generation can stabilize the disturbance caused by climate change to agricultural production and clean energy power generation, help power generation enterprises grow and promote the transformation of energy structure.

However, climate insurance is facing technical difficulties. There is a lack of historical data such as rainfall, typhoon level and earthquake magnitude, as well as the correlation between these data and the amount of disaster losses.

The report believes that insurance companies can strengthen cooperation with meteorological bureaus, meteorological science and technology companies and other relevant parties. Through the infrastructure construction of meteorological observation stations, the meteorological bureau can ensure more extensive and accurate monitoring coverage; Meteorological technology companies apply scientific and technological means such as UAV and satellite remote sensing and big data technology to weather monitoring to help insurance companies design insurance products with more accurate pricing and wider coverage.

In terms of green building insurance, according to the data of the International Energy Agency (IEA) and the United Nations Environment Programme (UNEP), the construction industry accounts for nearly 40% of the global energy and process related carbon dioxide emissions, including the production and transportation of steel, cement, glass and other building materials, as well as the on-site construction process. Therefore, the large-scale construction of green low-carbon communities and buildings is a necessary choice for China's low-carbon transformation.

Globally, green building insurance mainly includes green building property insurance and green building professional liability insurance to help customers make buildings more environmentally friendly and save energy. However, green building insurance relies on the control of the whole process of material selection and construction of building construction to ensure that the building meets the star standard of green building operation evaluation, which puts forward higher requirements for risk management ability.

The report believes that insurance companies should actively cooperate with various parties, based on relevant incentive policies, encourage the construction of national green building identification projects, promote the implementation of green building urban planning schemes, form demonstration effects with pilot projects, gradually accumulate risk knowledge, and pry the construction industry into a comprehensive green transformation.

- Advertisment -