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NEW YORK — Given a growing trend of credit union and consumer willingness and interest in turning over a new green leaf, could opportunity be knocking for green insurance?A recent Simon-Kucher & Partners’ study, “Green Insurance: A Lucrative Market?”, suggested that while its potential and sustainability has not been determined, it is worth deeper examination. The study found that the timing may be right as the environment continues to be an ever-growing topic of public discussion and businesses are increasingly influenced by potential threats to climate change.“In the past, it has been observed that investing in branding and product differentiation contribute to a distinct and positive image for a company. Innovative products such as green insurance policies that reflect customers’ needs should do just this and can help firms through difficult times,” the study said.So what exactly is green insurance? In general, green insurance can range from coverage for wind farms and hybrid cars to covering costs to restore green and LEED-certified buildings or replacing damaged property with green-rated equipment, products and construction materials.The study, which polled 1,500 U.S. insurance executives, suggested significant profit potential in the green insurance segment and aimed to determine the sustainability of the segment, as well as potential differences between the needs of green insurance customers and traditional insurance customers.Credit unions considering alternative insurance products can look at the statistics in the report. According to the results, the majority of insurance executives expect green insurance to be a durable and profitable market segment (67% of respondents). One explanation of this is the expectation that customers of green insurance products will have a higher willingness to pay and generate lower costs (72% and 56% of respondents, respectively). However, the study also found green insurance customers to be more knowledgeable and demanding about their providers. According to the study, a detailed knowledge of customers and their insurance-coverage demands is the core driver in successfully building a green insurance business.In addition, almost all respondents believe that provider and service certification will be important for the success of green insurance (94% of respondents). Providers will need to prove their credibility through certification and actions to capture this segment’s higher willingness to pay. For example, LEED certification from the U.S. Green Building Council indicates that a company’s business operates in an environmentally responsible and cost-effective manner and an EcoLogo demonstrates a commitment to the environment by certifying that products have met a series of stringent environmental standards. Featuring such environmental seals and communicating the eco-friendly nature of the business can help attract green insurance consumers.Strategic actions should focus on developing market excellence and strategic advantages in the green insurance business. The green insurance potential is no silver bullet and credit unions should do their research and build market excellence in this particular area. That means determining if there is a need or hole for it in your market, checking for potential partners for cooperation and determining the target market’s preferences and willingness to pay. Are regular products with a seal sufficient or are completely new products necessary?According to Simon-Kucher & Partners, in determining if green insurance is the right fit it boils down to making a well-informed decision and developing goal oriented products with optimized pricing. If there is a possible niche to fill in the market, then the first step is to develop highly customized benefit-based products for this segment’s needs. Once the products have been created, they should be heavily communicated through targeted advertising campaigns and reinforced with environmental certifications to address the segment’s desire for credibility.–[email protected]

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