Net-Zero Bancassurance[1]
The buzzword that will reverberate around the world in the next two weeks is Net-Zero, because this is what is being carried out at the UN high-level convention on climate change known as COP26, in Glasgow -UK, until 12 Nov 21.
Previously global banks have formed the so-called Net-Zero Banking Alliance, to commit in their financing policies that are directed only at industries that favor the achievement of Net-Zero.
Likewise with the global insurance industry. The biggest players have agreed to form the Net-Zero Insurance Alliance, the goal is the same — which is only to provide insurance protection to industries that are committed to Net-Zero, namely an effort to reduce net emissions to 0%, so that global temperatures do not rise higher than 1.5 C from pre-industrial temperatures.
With pressure from the two main financial sectors, namely banks and insurance, like it or not, the real sector industry must also be committed to achieving Net-Zero, because otherwise they will no longer be able to move freely in the absence of financial support from banks and no insurance protection to their risk objects.
In this situation, the product that will be sought after by the industry is Bancassurance, which is a combination of banking and insurance products, whereby the industry will still be able to obtain financing from banks and also continue to receive insurance protection.
What distinguishes it from existing banking and insurance products is the flow of premium funds. Net-Zero Bancassurance (N0BA) premium funds are only used for two things, namely to finance carbon sequestration projects, and to provide protection or guarantees so that the committed carbon sequestration targets are actually achieved.
For the banking and insurance world who are committed to Net-Zero, and also for industries that will soon start to be affected, the team we formed at N0BA, inshaAllah, will be able to assist you in developing your business in this Net-Zero era.
[1] Muhaimin Iqbal, ACII, ANZIIF(Fellow), AAIK, FIIS
