CFC enters carbon insurance market with new product

Specialist insurance provider CFC has announced its entry into the carbon insurance market with the launch of a “groundbreaking” new product.

CFC’s new Carbon Delivery Insurance is reportedly the first to cover both the physical and political risks faced by businesses purchasing voluntary carbon credits on a forward basis.

According to CFC, Carbon Delivery Insurance covers 100% of the purchaser’s investment for non-delivery of carbon credits.

The firm added, “CFC has built a sophisticated underwriting model that rates the carbon project itself rather than the policyholder.

“This makes the product easy to buy, and negates the need for lengthy, complex application forms and protracted discussions that take weeks to result in a quote. Rather, CFC can deliver same-day quoting and binding for a buyer purchasing from one of over 300 carbon projects and counting.”

George Beattie, Head of Innovation at CFC, commented, “Insurance is the mechanism by which all parties involved in the voluntary carbon market can collaborate in their decarbonisation projects with full accountability. 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.

“The introduction of our Carbon Delivery Insurance product represents a further step forward by the industry to protect buyers and galvanise quality growth in this market, empowering market participants to overcome its inherent risks.”

CFC has additionally revealed that it has partnered with IncubEx – a “fast-growing carbon innovation platform at the cutting edge” of the voluntary carbon market.

As per CFC, the partnership aims to develop the insurance sector’s role in the market, deliver API-based distribution of its carbon insurance products within trading venues such as Incubex’s TVCM carbon trading platform, and “facilitate introduction to specialist insurance brokers who will ultimately execute every deal”.

Neil Eckert, Chairman at IncubEx, said, “IncubEx recognises the role that the insurance markets have to play to take the carbon markets to scale.

“We have been delighted to support insurers in the market, such as CFC, who demonstrate the willingness and leadership to develop new products which will either protect and scale investments in nature and biodiversity or will support the removal of carbon to tackle climate risk.

“CFC has a strong track record of innovation, underwriting expertise and distribution partnerships and will be a very welcome addition to the industry’s offerings to take the carbon market to scale.”

Beattie continued, “Following 12 months’ intensive research and consultation to ensure we’re delivering a product that provides the peace of mind that the voluntary carbon market is looking for, our Carbon Delivery Insurance proposition marks our first step into the multi-faceted carbon market.

“To facilitate investment and encourage liquidity across the voluntary carbon market, we already have a number of other products in development to meet the needs of different parts of the carbon value chain.”

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