UK-based carbon insurance company Kita has taken an undisclosed strategic investment from Japan’s Tokio Marine Group and agreed to broaden its commercial collaboration, as insurers look to build risk-transfer tools and diligence capabilities for the voluntary carbon market.
The investment was made through Tokio Marine & Nichido Fire Insurance Co (TMNF), Kita said on 31 July.
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The deal deepens an existing relationship with Tokio Marine Kiln, with the companies already having worked on political risk insurance products aimed at carbon credit transactions.
Kita said the expanded partnership will now extend to additional Tokio Marine Group companies to support the “growth and integrity” of global carbon markets.
In Japan, Kita and TMNF are developing insurance designed to protect carbon credit buyers against transaction risks, including the possibility that prepaid credits are not delivered as contracted.
The companies will also explore offering carbon project risk assessment services to TMNF customers using satellite-based analytics.
TMNF plans to combine these assessment capabilities with carbon project support services provided through Nippon Koei, an engineering consultancy within the Tokio Marine Group.
Those services include field assessments, project design, due diligence and project implementation support.
TMNF said the aim is a “one-stop” offering across the carbon project life cycle, including “rapid preliminary screening in the early stages of project evaluation, detailed investment assessments supported by field surveys, and long-term support for carbon credit generation and project delivery”.
Services under consideration may also include support for international carbon projects spanning origination and structuring, feasibility work, technical and human rights due diligence, implementation and operational management, and ongoing compliance and monitoring.
The announcement comes as Tokio Marine also deepens ties elsewhere.
In March, Berkshire Hathaway’s National Indemnity Company agreed to buy a 2.49% stake in Tokio Marine for around $1.8bn as part of a “strategic partnership” covering equity investment, reinsurance collaboration and joint work on mergers and acquisitions.
