Howden, the London-based insurance broker, announced it is launching a UK insurer called Parhelion, which it describes as “the world’s first fully sustainable insurer.”

Aiming to raise $500 million in capital, Parhelion plans to begin underwriting from Jan. 1, 2022.

Parhelion’s new and diversified environmental, social and governance (ESG) products will meet the risk financing needs of a greener economy, said Howden, maintaining that the insurance industry is starved of truly sustainable capacity.

The new business has been seeded by Howden and will match the surge in institutional capital seeking sustainable investment strategies with the growing demand from corporates looking for an insurance provider to support their journey towards ESG transition and a more resilient future, added the broker.

Parhelion aims to support an underwriting approach based on data, technology and proprietary ESG criteria.

Howden said empirical studies evidence a persistently strong correlation between corporates with advanced ESG credentials and low insurance claims, which will enable Parhelion to offer premium and cover at advantageous terms, while generating strong shareholder returns.

Parhelion will provide both traditional risk coverage and create new ESG-specific products for risks of the future, meeting the varying requirements of a wide range of corporates – from those already highly ranked on ESG criteria to those just starting out on their transition journey.

At the end of 2020, over $40 trillion of assets globally were invested in ESG-aligned and sustainable impact strategies, nearly double the amount invested just four years earlier, but very little has been deployed across the re/insurance industry, said Howden, quoting statistics from research firm Opimas.

Julian Richardson and David V. Cabral, who are re/insurance and climate risk finance experts, will lead Parhelion as co-CEOs. They will be joined by reinsurance executive Chris Sharp as chief underwriting officer in September 2021.

“Companies are transitioning to sustainable procurement and this should not be limited to physical good; it must also include financial services and products,” said Parhelion’s co-CEOs Richardson and Cabral.

“Our vision is to support customers’ transition to a more sustainable and resilient future while creating a virtuous cycle of improved risk control and underwriting performance, irrespective of the market cycle,” they added.

For its capital raise, Parhelion is being advised by Howden Capital Markets and TigerRisk Capital Markets & Advisory.

Source: Howden