Tokio Marine targets lead position in green transition with GX launch

By Rebecca Delaney

May 28 - (The Insurer) - Tokio Marine has launched a new international offering, Tokio Marine GX, to target an anticipated increase in demand for insurance related to the green energy transition.

• Tokio Marine GX to build on GCube's renewable energy focus

• TMGX aims for 10% of global premiums by 2030

• Innovative insurance solutions crucial for climate goals, McLachlan says

The group said the new offering will build on its existing GCube subsidiary MGA, which focuses on renewable energy.

Announcing the launch, Tokio Marine said it has observed significant global capital investments aimed at carbon neutrality and the net-zero transition, which it expects to continue alongside an acceleration in GX-related insurance.

The carrier said the offering will aim to contribute to social development and the growth of new industries through the research and development of insurance products and risk consulting services that address risks associated with new technologies in transition-related sectors.

Fraser McLachlan, CEO of GCube, has been appointed to the new role of chairman at TMGX, with Ben Kinder as CUO, in addition to his role as CUO for marine, energy and renewables at Tokio Marine HCC International.

In an interview with Reuters, McLachlan said TMGX will offer up to $500 million in cover on any single risk and is targeting at least a 10% share of global premiums by 2030, estimated at around $10 billion.

The new technologies TMGX would look to cover include small and middle-market nuclear, hydrogen, fuel cells, new solar technologies including floating solar and electric vehicles, he said.

"There's a lot of sectors that really haven't been served by the insurance space," McLachlan said.

He highlighted the market for tax credit insurance, where businesses get cover in case they are unable to access the credits as planned, thereby lowering their risk to bank lenders and the interest rate on borrowing, as one opportunity.

"It's a win-win. Lenders love it as it transfers their risk; we like it, we're getting a premium for a risk we're comfortable with; and it allows the project to be financed at more equitable terms."

McLachlan said the company could also look to strike deals with managing general agents, intermediaries given authority by the insurer to write business in their name, saving them the time and expense of building out a team.

"It's a pretty quick win ... it allows you instant access to a market," McLachlan said.

Finding more innovative ways to finance the risks associated with the transition was critical if the world is to hit its climate goals.

"Unless people start coming to the table with more creative insurance solutions ... we're going to see a lot of these projects stall," he said.