M&S ushers in new era of green insurance

Retail giant M&S has laid claim to a UK first with the adoption of a policy designed to help its home insurance customers cut their energy use and carbon emissions.

The company's M&S Money division has announced that from this week, home insurance policyholders making a claim will be offered replacement appliances or construction work that seeks to significantly reduce their environmental impact.

Traditionally, insurers replace lost or damaged possessions with equivalent new items, but M&S has committed to ensuring that the kitchen appliances it offers to customers boast the highest A-grade energy efficiency rating.

Similarly, the company said any work to rebuild a property that has been severely damaged will be undertaken in line with level four of the Code for Sustainable Homes, which requires the use of sustainable materials and a cut in the building's carbon emissions of at least 44 per cent on that required by standard building regulations.

M&S said it expected considerable interest from customers in the new policy, citing a survey of more than 2,000 people which found that 61 per cent of respondents would be interested in insurance cover that could help them to limit their environmental impact.

"These new policy features, which we believe are firsts in the UK insurance market, mean that the M&S Home Insurance policy is one of the most environmentally friendly products of its kind," said David Wells, M&S head of insurance.

Nick Kidd of AXA Insurance, which underwrites the policy, added that the focus on providing replacement products that delivered real cuts in emissions offered more tangible environmental benefits than those green products based on carbon offsetting.

The new homes insurance policy marks a growing trend among insurers to offer policies that seek to actively encourage customers to curb their emissions.

A number of motoring insurance firms have launched so-called green pay-as-you-drive policies in recent years where drivers pay for insurance based on how much they drive, providing an additional incentive for them to curb unnecessary journeys. Similarly, a growing number of corporate insurers have raised the prospect of reduced premiums to firms that develop effective climate change mitigation and adaptation strategies.