Press Release: Chaucer announces innovative new partnership with Kita

Chaucer announces innovative new partnership with Kita, the carbon insurance specialist, to insure the delivery risk of carbon sequestration projects.

  • Addresses a key protection gap for businesses investing in high quality carbon sequestration projects

  • Increased confidence leads to greater investment, resulting in more carbon sequestration projects and less CO2 in the atmosphere

  • Dramatic increase of investment in high quality carbon sequestration projects needed to meet Net Zero targets

  • Kita is an early mover in the fast-developing world of carbon insurance for the growing carbon markets, helping reduce risk with insurance that safeguards the quality and performance of carbon purchases

  • Chaucer is a key investor in Kita, complementing their ambitious ESG strategy

Chaucer announces innovative new partnership with Kita

Chaucer, the global specialty (re)insurance group, today announces a new partnership with carbon credit insurance specialist Kita to bring first of its kind insurance products to the carbon markets. Kita’s first product, Carbon Purchase Protection Cover, insures the buyer of forward purchased carbon credits against delivery risk, removing a significant protection gap. Increased buyer trust in carbon delivery leads to greater flows of capital to help scale carbon sequestration projects at the rate necessary to fight the climate crisis. Chaucer is investing in Kita as well as providing lead underwriting capacity; follow capacity will be provided by Munich Re Syndicate and RenaissanceRe. Kita was approved as a Lloyd’s coverholder in December 2022.

Kita protects carbon credit buyers against the risk of carbon sequestration projects failing to deliver expected volumes of high-quality carbon credits. For example, a company with a high-integrity net zero strategy might forward purchase carbon removal credits in an afforestation carbon project, with the aim of enabling an environment in which young trees can grow, capturing carbon and generating biodiversity benefits. Carbon Purchase Protection Cover protects against the risk that the afforestation project doesn’t generate verified high-quality carbon credits, due to, for example:

  • Avoidable loss – e.g., the forestry project developer making an error in the planting phase

  • Unavoidable loss – e.g., natural catastrophe such as fire, wind, or other perils such as disease or pest

  • Fraud or negligence which invalidates the carbon credits prior to delivery.

Examples of a valid claim are:

  • The forest developer contracted by the landowner mis-managed their financial commitments to purchase sufficient sapling stock for a forest creation scheme. As a result, the landowner was forced to contract with a new developer to take-over the forest management. This change of developer led to a lower-than-expected carbon yield in year 6 of the project resulting in a claim.

  • Due to a shortage of forestry workers, an area of woodland surrounding a power transmission line was not cleared during the winter. The following summer, the forest suffered a higher intensity annual burn in the area leading to a biomass rather than just dead-wood loss. This resulting carbon shortfall could lead to a claim.

Hayley Maynard, Head of Innovation at Chaucer says: “Carbon sequestration projects will play a key role in the fight against climate change and Kita, alongside Chaucer, will be instrumental in enabling higher integrity in the carbon markets by safeguarding the quality and performance of carbon purchases.”

“Chaucer is delighted to partner with Kita. Providing insurance for carbon credit projects will give businesses the confidence they need to invest at scale in high quality carbon sequestration projects and meet their net zero targets.”

“We believe our partnership and investment in Kita will revolutionise the carbon credit industry and help Chaucer deliver our ESG commitments and be a genuine force for good in supporting the sustainable transition.”

Natalia Dorfman, CEO and co-founder at Kita says: “We are honoured to be working alongside a (re)insurer of Chaucer’s stature, as well as Munch Re Syndicate and RenaissanceRe, to bring Carbon Purchase Protection Cover to the market. To prevent the worst impacts of climate change, we must remove gigatons of CO2 from the atmosphere annually. This is a mammoth task, and it requires de-risking and access to capital for carbon sequestration solutions. Insurance can act as a fundamental enabler - by removing risk and increasing trust in the market, insurance will help drive capital to help quality carbon projects scale. With its innovative approach to new products and strong commitment to the fight against climate change, Chaucer is the perfect partner to help Kita pursue our mission of bringing this carbon insurance to market at speed.”

End

Media Enquiries

Maria Hughes, Mattison Public Relations

+44(0)77 3169 3281

maria.hughes@mattison.co.uk

Greer Stead, Chaucer

+44(0)20 7105 8258

greer.stead@chaucergroup.com

About Chaucer:

Chaucer are a leading specialty (re)insurance group working with brokers, coverholders and clients to protect and support business activities around the world. Our services are accessed both through Lloyd’s of London and the company markets.

We are defined by an enterprising, bespoke approach to (re)insurance, enabled by the individual character, experience and imagination of our expert teams.

Chaucer is a member of the China Re Group and backed by their financial and operational resources. China Re is one of the world’s largest reinsurance companies whose outstanding and comprehensive strength is rated A (excellent) by AM Best and A (strong) by S&P Global Rating.

Chaucergroup.com

About Kita

Kita is the carbon insurance specialist. Kita’s purpose is to enable more financing for high quality carbon removal projects to scale, by removing risk with insurance products that safeguard the quality and performance of carbon purchases. With reduced risk in the carbon transaction, carbon removal solutions can access greater flows of consistent capital to scale their impact faster. Kita’s first product is Carbon Purchase Protection Cover, protecting buyers of forward purchased carbon removal credits against under-delivery. Kita is a coverholder at Lloyd’s of London.

For more information about Kita, visit www.kita.earth

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