Munich Re's response

Every risk involves opportunity. And that also applies to climate change. Munich Re supports international efforts to limit the effects of global climate change by delivering innovative solutions that meet the challenges it poses. For instance, in the field of emissions trading, the mechanisms approved in the Kyoto Protocol transform emissions into economic goods and open up entirely new business opportunities for companies. To help achieve a breakthrough in international climate protection, Munich Re has deployed its technical know-how and extensive experience to develop an innovative coverage concept known as the Kyoto Multi Risk Policy.

The cover, which we plan to market in collaboration with our cedants, incorporates familiar elements from property insurance such as fire, CAR and EAR, from credit and bond insurance and from the insurance of political risks. Its special feature is that it secures carbon credits, or to be more precise, provides cover against the risk that a facility set up as part of a KMR project, such as a biomass power plant, might not produce the expected reductions.

You will find further information on emissions trading, the Clean Development Mechanism and the Kyoto Multi Risk Policy in Topics 2/2007.