The carbon credit insurance market could reach an annual gross written premiums (GWP) of $1bn by 2030, according to a new landmark report from Oxbow Partners and Kita.
According to the study, industry leaders, including brokers like Aon, Howden, Marsh, and insurers such as AXA XL, CFC, Chaucer, and Fidelis, have expressed optimism about the growth prospects of the carbon credit insurance market.
The industry giants believe it’s a matter of “when, not if” the market will experience explosive growth.
The report, entitled “Are carbon credits the next billion-dollar insurance market?,” also explains the critical role of insurance in bolstering the carbon market, especially as the global community intensifies its efforts towards decarbonisation in a bid to combat climate change.
Estimating the total addressable market for carbon credit insurance, the report anticipates a substantial growth trajectory, projecting it to reach $1bn of annual Gross Written Premium (GWP) by 2030 with that figure rising to a whopping $10-30bn GWP by 2050.
Miqdaad Versi, Head of the Sustainability Practice at Oxbow Partners, was upbeat about the potential for insurance, said, “The carbon credit insurance market is an exciting opportunity for those looking for an avenue to be green with integrity and make a profit. The acceleration in the market is inevitable if the world is going to decarbonise. With new capacity providers already entering in 2024, the future looks bright.”
James Kench, Head of Insurance at Kita, added, “The insurance market is on the front line for climate risk and is uniquely placed to help business and society navigate through increasingly uncertain times. This report is a call to action for the insurance industry to embrace a vast new carbon risk pool with purpose.”
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