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  3. Preventing Global Warming by Promoting the Development of Clean Energy

Preventing Global Warming by Promoting the Development of Clean Energy

In order to prevent damage due to climate change from spreading, Tokio Marine Group is examining the possibility of installing and operating renewable energy facilities in Group companies while also providing products and services such as non-life insurance for businesses related to carbon credits, liability insurance concerning environmental pollution and environmental consulting.

Relation between written content and SDGs
Relevant SDG Relevant target Description of related content
7. Affordable and clean energy 7.1 Ensure universal access to affordable, reliable and modern energy services
7.2 Increase substantially the share of renewable energy in the global energy mix
Mega-Solar Package Program
Impairment Liability Coverage for Geothermal Power Generation Operators
9. Industry, innovation and infrastructure 9.4 Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes Mega-Solar Package Program
Impairment Liability Coverage for Geothermal Power Generation Operators

We are undertaking the following actions to achieve the goals described above in the three areas of examining the possibility of clean energy facilities, operating clean energy facilities and credits gained from clean energy facilities.

  • Examining the possibility of clean energy facilities
    • Mega-Solar Package Program
    • Environmental Consulting
  • Operating clean energy facilities
    • Mega-Solar Package Program
    • Impairment Liability Coverage for Geothermal Power Generation Operators
    • Environmental Impairment Liability Coverage
    • Environmental Consulting
  • Credit gained from clean energy facilities
    • Impairment Liability Coverage for Geothermal Power Generation Operators
    • Carbon Credit-related Insurance
    • Environmental Impairment Liability Coverage
    • Environmental Consulting

Mega-Solar Package Program

With the launch of Japan's Feed-in Tariff Scheme for Renewable Energy in July 2012, the planning and construction of “mega-solar” large-scale solar power generation facilities is surging across the country. In order for businesses to stably operate the facilities, measures are necessary to evaluate business risks over a long term of 10 to 20 years and from a variety of angles, starting from the installation stage.

In July 2012, Tokio Marine & Nichido began marketing its Mega-Solar Package Program. Through risk consulting and insurance products, the program offers an integrated solution for the risks involved in mega-solar projects.

Making Use of Evolving Risk Assessment Approaches in Consulting

The Mega-Solar Package Program is composed of 1) risk consulting (natural disaster risk assessment and soil contamination status assessment) and 2) arrangement of property and casualty insurance.

In the event of damage from earthquake, tsunami, water, wind, high tide or other natural disasters, mega-solar projects may be forced to review installation expenses or construction times, and business operation following launch may be severely affected.

Based on natural disaster information and knowledge accumulated over years in the property and casualty insurance business, the product offers risk consulting services that include a three-stage evaluation of natural disaster risks at planned mega-solar installation sites and soil contamination status assessment consulting through means such as site usage history surveys and field investigations. By incorporating such consulting, mega-solar business operators are able to accurately assess the risks that can threaten business continuity and can effectively carry out necessary investments and measures.

Conducting risk assessments of mega-solar projects has helped us build up extensive know-how, which we are using to start consulting services for renewable energy facilities for biomass and wind-power generation businesses.

Arrangement of Appropriate Property and Casualty Insurance at the Mega-Solar Project Installation and Operational Stages

As various risks are expected at every stage – from installation to operation – in mega–solar projects, appropriate risk management is achieved by analyzing risk factors that can impact project management and by arranging for insurance against each risk. Looking specifically at risks to installation work, insurance involves compensation for damages in the event of accidents originating in solar power systems during installation or after completion, including damage to or destruction of solar systems or temporary installations from calamities such as fire or lightning, as well as accompanying loss of profits due to delay of operation. Risk hedging against the preceding factors is possible through erection all risks insurance, delayed start of operations insurance and various forms of liability insurance. With regard to risks to operation, insurance involves compensation for damages originating in ownership or management of facilities, including damage to or destruction of solar power systems from calamities such as fire, as well as accompanying loss of profits if operation is halted. Risk hedging against the preceding is possible through commercial property insurance and various forms of liability insurance.

The mega-solar project flow from installation work to operation

Site investigation(1. Confirm risk situation of planned site 2. Perform soil contamination survey at planned site / Hazard environment report / Soil contamination survey) Installation work(1. Prepare for liability to third parties during installation work 2. Compensation for damages due to disaster or accident at solar power system during installation work / Contractors general liability insurance / Erection all risks insurance) Completion of installation work and handover(1. Prepare for damages from delayed delivery 2. Prepare for liability to third parties after completion of installation work (after handover) / Advance loss of profit insurance / Products liability insurance) Operation(1. Cover damages to solar power systems due to natural disasters and other accidents 2. Prepare for liability to third parties originating in ownership, use or management of solar power systems / Corporate property insurance / Early disaster recovery support service / Premises liability insurance)

Solar power and other forms of renewable energy are indispensable as new energy sources to support the social infrastructure of the future. Based on the role that insurance companies bear in society, Tokio Marine & Nichido will support the smooth diffusion of renewable energy by providing insurance products and risk consulting services and contribute to the development of a sustainable society.

Commenced Sales of New Impairment Liability Coverage for Geothermal Power Generation Operators

Geothermal power generation does not emit any CO2, a primary cause of global warming, which has put it in the spotlight as a low-cost renewable energy with the potential for stable power supply. There are high expectations for the application of this form of energy and the government has even formulated a plan to expand capacity of geothermal power generation facilities three-fold by 2030 compared with current levels.

Against this backdrop, in June 2016 Tokio Marine & Nichido started sales of a “geothermal package plan” that underwrites such risk as property risk, construction risk and liability risk from ground surveys to operations for geothermal developers. Within this “geothermal package plan,” liability risk compensation provides peace of mind to nearby hot spring operators (hot spring union) with regard to geothermal development. This is achieved through compensation for damages if there is a decline in the volume of hot water or a change in hot spring quality in a nearby hot spring area during geothermal development or operation of a geothermal power generation facility. Such damages include the cost of investigation into the cause, which is covered by the geothermal developer, or lost profit on the part of the hot spring operator. Payment of the cost for investigating the cause at the stage when a reduction in hot spring volume or a change in spring quality has been objectively confirmed irrespective of the existence or not of liability on the part of the geothermal developer is a first for Japan.

Tokio Marine & Nichido will continue to contribute to the proliferation of geothermal power through this product going forward.

General flow of geothermal development (model case of 30,000kw power output)

Local understanding Approx. 2 years:Geological survey, excavation survey → Approx. 3 years:Exploration (well drilling survey, etc.) → Approx. 3-4 years:Environmental assessment (Required above a certain size) → Approx. 3-4 years:Production well, injection well drilling → Installation of power generation equipment

Source: Prepared using basic data for investigating purchase price in FY2013 issued by Resources and Energy Agency of the Ministry of Economy, Trade and Industry

( (1.76MB)) (in Japanese)

Sale of Environmental Impairment Liability Coverage

In response to the growing need for ensuring compliance with environmental regulations and mitigating lost profit caused by the emission of contaminants, U.S.-based Philadelphia Insurance Companies (PHLY) offers environmental insurance products with environmental impairment liability coverage against various risks, including impairment liability for contamination of the environment, for manufacturers, processing companies, construction companies, environment-related operators, environmental consultants, pharmaceutical firms, electricians and plumbers, hotel operators and real estate agencies.

These insurance products protect policyholders from impairment liability for damage to third parties and remediation expenses caused by environmental contamination, thereby contributing to the protection of the natural environment and the health of local residents while encouraging the promotion of regional industries.

First Insurance Product Responding to Carbon Credits

U.K.-based Tokio Marine Kiln has commenced underwriting an insurance product that covers carbon credit eligibility risk from April 2011.

Under the EU Emissions Trading Scheme, companies and investors can purchase the rights in advance to buy carbon credits at a given price that will be generated as credits at a later date. However, as a result of discussions for reviewing credit certification standards from 2012 onwards, concerns have been raised over various aspects such as the emissions reductions of trifluoromethane (HFC-23) and nitrous oxide (N2O) generated from adipic acid production projects no longer receiving approval as credits. In response, Kiln is underwriting insurance for a major bank to cover this risk. Kiln is focusing efforts on the mechanisms of this insurance within other trading systems that include an emissions trading system in New Zealand.

Environmental Consulting

The conventional corporate initiatives for the environment have been primarily passive ones, centered on complying with environmental laws and ordinances on matters such as pollution prevention. However, besides response to laws and regulations, there is now a demand from society for a proactive response that puts environmental initiatives into practice as corporate social responsibility and as a business. There is also a need for companies to aim for environmental management that harmonizes the environment with the economy. To help companies realize environmental management, Tokio Marine & Nichido Risk Consulting supports the drafting of environmental strategy, including environmental management philosophy, environmental targets and medium- and long-term planning, while taking into account clients’ management strategies.

First Auto Insurance Eco Mark Certification Acquired for Financial Products

In December 2010, Tokio Marine & Nichido acquired the first auto insurance Eco Mark *1 certification for financial products from the Japan Environment Association (JEA) for its efforts to promote various initiatives in the environment-related field. These included promotion of the Green Gift Project, dissemination of information on eco-safe driving and accident reduction via the company website, increased use of recycled parts in auto repairs and premium discount services for hybrid, electric and compressed natural gas vehicles.

In 2011, Tokio Marine & Nichido won the Silver Prize in the Eco Mark Award 2011*2 sponsored by JEA, becoming the first company in the financial industry to receive an Eco Mark award. In granting the award, JEA highly recognized the company's efforts to promote the widespread use and increase the visibility of Eco Mark-certified auto insurance products (creation of Eco Mark awareness posters and extensive use of the Eco Mark label on auto insurance leaflets and renewal notices) and to offer eco-friendly auto insurance that allows policyholders to participate in activities to reduce environmental impact through the Green Gift Project. Becoming carbon neutral in its domestic business activities in fiscal 2009 and fiscal 2010 was another point that was recognized by JEA.

Total Assist Auto Insurance Certification Number:10147001 This auto insurance contributes to global environment preservation activities by offering a choice of Web contract. ECO・MARK・AWARD2011
  • *1
    The Eco Mark environmental label is granted to products that are certified as having less impact on the environment throughout their lifecycles and being effective in preserving the environment.
  • *2
    The first award scheme established in 2010 in relation to the Eco Mark. Awards are presented to companies and organizations proactively engaged in activities to achieve the objective of the Eco Mark project: "Creation of a sustainable society through the wise choice of environment-friendly products by consumers and environment improvement efforts by companies."

Accident-Related Auto Repairs That Are Friendly to the Environment

Asante environment-conscious auto insurance

Tokio Marine & Nichido and Nisshin Fire & Marine Insurance (“Nisshin Fire”) have been undertaking an initiative to promote environment-conscious auto repairs following accidents with the cooperation of customers. This initiative, contingent upon the approval of customers, encourages the repair, not replacement, of parts damaged in an accident or the use of recycled or rebuilt parts if the damage is beyond repair, to reduce industrial waste and utilize resources more effectively. Following “The Declaration of the Promotion of the Use of Recycled Parts,” a joint statement made by The General Insurance Association of Japan and its member insurance companies in October 2011, we have decided to step up this initiative by generally requiring the use of recycled parts when repairing company-owned vehicles and encouraging their use in personal vehicles of employees.

For the same reason, Nisshin Fire provides an environment-conscious auto insurance, Asante, which provides a 10% discount on insurance premiums if a car repair is done using recycled parts at one of the automobile repair shops specified by the company.