Japanese insurer Tokio Marine has set up a unit to insure activities li
nked to the low-carbon transition such as green hydrogen, shipping and ce
ment and is targeting $1 billion in revenues by the end of the decade, its chair told Reuters.
The new unit, Tokio Marine GX (TMGX), will provide advisory and risk
transfer services to com
panies across a range of sectors looking to decarbonise, and build on
the existing work of its GCube renewable energy team, Fraser McLachlan said.
TMGX will offer up to $500 million in cover on any single risk and i
s targeting at least a 10%
share of the global pre
0 billion, he said.
While some peers had already begun to write more transition-linked bus
Watch More Image Part 2 >>>
iness, most had done so using existing sectoral teams rather than creating a dedicated unit, he said.
“We’re going to rip up the rule-card a little bit here,” McLachlan said.
“We’re going to look at some new technologies, we’re going to look at m
ore sophisticated ways of being able to risk transfer business,” such as offering
insurance for tax credits and surety guarantees.
Launching with existing GCube headcount of around 50 and revenue of a
round $200 million, both would likely double over the next couple of years, he said
. Parent Tokio Marine is the largest property and casualty insurer in Japan with a market value of around $70 billion.
Among the new technologies TMGX would look to cover include small and mid
dle 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.
Another area ripe for extra help was 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.