The product is an extension to AXA XL’s existing marine hull product and indemnifies a vessel’s carbon output in the event of an unforeseen extended journey, caused by a covered risk, which results in additional emissions. Following such an event, the policy pays out with voluntary carbon credits equal to the amount of excess emissions emitted.
“Our Excess Emissions Insurance aims to play an additional role in helping our marine clients to support global net zero ambitions,” said Sundeep Khera, AXA XL’s head of marine for the UK and Lloyd’s, and chief underwriting officer, global marine hull.
“Shipping companies are working hard to reduce the carbon intensity of international shipping, and while carbon credits do not cancel out emissions, projects that generate voluntary carbon credits do contribute to the overall goal of global carbon neutrality,” Khera said.
To be eligible for the product, a firm must hold an existing AXA XL UK and Lloyd’s marine hull policy, be in the process of decarbonising and have a proven SBTi-aligned reduction strategy, the insurer said.
The product was developed by AXA XL’s in-house carbon team alongside the impact company ClimateSeed. The firm was acquired by AXA Investment Managers in July 2021 through its Impact Investing Strategy.
A brochure published by the insurer provided examples of how the product works: “For instance, suppose your ship encounters machinery damage and needs to divert to another port for repairs, leading to unintentional excess emissions. In that case, we can cover those emissions through insurance.”
This announcement comes five months after Airmic and AXA Climate launched the online AXA Climate Risk Management School learning programme as an exclusive member benefit. The series of online courses were made available, free of charge, to Airmic members from the beginning of March.
The programme aims to provide a fundamental understanding of the scientific principles behind climate change, biodiversity collapse and natural resource depletion, as well as how these issues impact lives and organisations.