Based on market-first calculation, achieving industry-wide carbon neutrality would cost £9.8 million in carbon credits
LONDON, 29 August 2024 — Sedgwick, a leading global provider of claims management, loss adjusting and technology-enabled business solutions, today revealed that insurance-related domestic building repairs in the UK, which have an average value of £8,000, have a carbon cost of 1,496.6 kg CO2e — equivalent to an average-sized petrol car driving 9,131 miles.
Based on data from all repair contracts handled by Sedgwick’s managed contractor network in the first half of 2024, the company also established that an average of 1 kg of CO²e is produced for every £7.80 spent on domestic building repairs. This is the first time the industry has had the capability to assign an accurate estimate of carbon costs to domestic property claims repairs.
Graphical depiction of the cost calculation to offset carbon emissions on different types of domestic building repairs, based on today’s price of £30 per T CO2e
Sedgwick determined these figures using its new carbon value calculator, which was designed in-house and conforms to Greenhouse Gas Protocol standards. Introduced in December 2023, the calculator is fully integrated into the company’s digital cost-estimating tools and automatically assigns carbon emission values for every repair on a granular per-line basis.
The Association of British Insurers estimates that insurers paid out £2.55 billion on home insurance claims in 2023. Based on Sedgwick’s average 1,496.6 KG CO2e value for an £8,000 claim, this equates to a total industry carbon emissions figure of approximately 326,504 T CO2e. Using the company’s carbon credits calculation, it would, therefore, cost the insurance industry in the region of £9.8 million to offset the total UK domestic property claims repairs footprint, buying carbon credits in today’s market at £30 per tonne.
Sedgwick’s carbon value calculator also identified that flood and escape of water claim repairs contribute the highest carbon emissions. Options to reduce these emissions include using new low-carbon materials, such as insulation and emulsion, which Sedgwick can now specify.
Additionally, the company’s carbon value calculator pinpoints opportunities for more environmentally friendly repairs. Across the entire portfolio of claims, substituting low-carbon hemp insulation and graphene paint for traditional materials could reduce carbon costs by 4.03% while increasing repair costs by just 0.73%. It also calculated that resilience repairs, with minimal strip-out and remotely monitored drying, can reduce carbon emissions by 30%.
“Establishing the baseline for carbon emissions in insurance-related building repairs is the first crucial step towards achieving carbon neutrality across the industry,” said Peter Wassell, Technical Director of Sedgwick’s UK repair solutions. “More work must be done to promote sustainable repair programmes, and we can now provide tangible evidence of the measurable benefits they deliver.”
Neil Gibson, CEO of Sedgwick in the UK, said: “Our high-performing carbon value calculator is an in-house proprietary innovation that showcases our commitment to leading and promoting sustainable claims management practices. The calculator’s day-to-day application provides clients with the support they need to document carbon emission savings at no additional cost. We are currently working with several clients to provide data that can help set baselines for carbon emissions in both commercial and domestic property repairs. This level of collaboration supports Sedgwick’s goal of achieving carbon net-zero status by 2030.”
About Sedgwick
Sedgwick is a leading global provider of claims management, loss adjusting and technology-enabled business solutions. The company provides a broad range of resources tailored to clients’ specific needs in casualty, property, marine, benefits, brand protection and other lines. At Sedgwick, caring counts; through the dedication and expertise of 33,000 colleagues across 80 countries, the company takes care of people and organizations by mitigating and reducing risks and losses, promoting health and productivity, protecting brand reputations, and containing costs that can impact performance. Sedgwick’s majority shareholder is The Carlyle Group; Stone Point Capital LLC, Caisse de dépôt et placement du Québec (CDPQ), Onex and other management investors are minority shareholders. For more, see sedgwick.com.
Tags: building, Claims, Commercial claims, environment, Environmental impact, Floods, pollution, sustainability, sustainable, UK, United Kingdom