Sparebank 1
Sparebank 1
Banking and Investment
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Sparebank 1 is an alliance of 14 Norwegian financial institutions. The organisation provides management and business development services to their member banks, and facilitates inter-organisational cooperation and capability sharing. Sparebank 1 is a signatory to the UN Principles for Responsible Investment, as well as a member of the Norway 203040 alliance, a business-led climate initiative. Four of Sparebank 1’s members are also members of the UN Global Compact.
Sparebank 1’s members are pioneering sustainable finance solutions. In early 2018, Sparebank 1 Boligkreditt issued the world’s largest green mortgage bond, equivalent to €1 billion, which will allocate funds mortgages for energy efficient homes. In order to incentivise safer and greener driving, Sparebank 1 has developed an app that monitors driving habits and cuts insurance costs for low-impact driving. In addition, the group is highly transparent about their environmental impact – each year they produce a ‘Climate Scenario’ report detailing the groups emissions from electricity consumption, transport and more.
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Sparebank 1
Headquarters Norway
Founded 1996
Company type Private corporation
Company size 5001-10,000 employees
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Micro-Insurance for Protecting Smallholder Farmers
The Agriculture and Climate Risk Enterprise (ACRE) makes use of the data from automated weather stations, satellites and other mobile technologies to bring affordable insurance to smallholder farmers in East Africa.
ACRE has become the largest agriculture insurance program in sub-Saharan Africa and the first to leverage mobile technologies to reach smallholder farmers. The primary function of ACRE is to act as a connecting and coordinating agent between local insurance companies and smallholder farmers. ACRE tracks weather-related repayment risk, and encourages insurers to offer a variety of insurance products tailored to smallholders’ needs. In doing so, its activities have also paved the way for larger credit institutions to enter the agricultural insurance and reinsurance market.
For example, ACRE’s replanting guarantee provides drought insurance coverage on individual bags of seeds. The coverage on each bag is activated by texting a code to ACRE and paying the insurance premium via mobile. ACRE then monitors conditions on the farm via satellite imagery for 21 days. In case of drought, farmers are compensated directly with money to their phones.
Why you should care
Over 96% of agricultural land in Kenya and Rwanda is rain-fed and vulnerable to variable rainfall and drought. Consequently, finding viable and affordable ways to manage these weather-related risks is of great importance to food security and economic stability. The insurance products and technologies developed by ACRE offer an approach capable of reaching thousands of remote farmers without amassing high transaction or delivery costs.
How the Global Goals are addressed
No poverty
Access to affordable insurance and micro-finance builds the resilience of farmers vulnerable to climate-related extreme events and other economic, social and environmental shocks and disasters.
Zero hunger
Floods and droughts can have disastrous impacts on local food security in the affected rural areas. Tailored insurance products with rapid payout via mobile money can help to ensure people have money to buy food when crops fail.
Decent work and economic growth
A 2012 impact study by the International Finance Corporation showed that farmers insured by ACRE’s products received 16% higher earnings and invested 19% more than the uninsured. In addition, 97% of farmers insured through ACRE received loans linked to their insurance, encouraging economic growth.
Industry, innovation and infrastructure
With its 130 solar-powered and automated weather stations, ACRE can operate without sending inspectors to remote villages to physically verify each claim. This innovation increases productivity and sustainability in the industry.
Climate action
ACRE is projected to reach three million farmers across East Africa by 2018, bringing greater economic security in the face of climate change, improving the adaptive capacity of smallholder farmers.
ACRE Africa
ACRE Africa is a service provider that links farmers to insurance products to make it easier for them to invest in their farms. The insured products design varies from crop and livestock to protection of farmers against bad weather.
Global Goals addressed
Developed in: Kenya, Switzerland
Deployed: Kenya, Rwanda, Tanzania
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Affordable Health Insurance via SMS
Purchasable through mobile phones and SMS, MicroEnsure offers affordable health, life and disability insurance for low-income residents in 9 countries.
Operating in Asia and Africa, MicroEnsure’s innovative SMS-based platform and partnerships with mobile carriers enable customers to get insured in seconds and pay using pre-paid airtime. Claims can be submitted via a text message and are paid to the customer’s “mobile wallet” within hours. To keep the premiums low, MicroEnsure negotiates with insurance companies on behalf of their clients.
MicroEnsure has a number of different plans designed for specific locations. In India, for instance, the company offers cashless access to hospitals for poor, rural households for about $5 per person per year. Under an initiative in Ghana, MicroEnsure partners with microfinance banks to pay a borrower’s loan installment while the person is hospitalized. The company’s insurance platforms have provided more than 48 million customers in Africa and Asia with their first insurance policies.
No one wakes up in the morning wanting to buy insurance – but billions of people in emerging markets wake up every day worried about the risks they face.
Richard Leftly – CEO of MicroEnsure.
Why you should care
Before the country entered the Zambian market, only 1% of the population had access to insurance. In just one month after MicroEnsure offered their product, this jumped to 17%. MicroEnsure relies on the ubiquity of the cellphones to offer low-cost, quality health insurance to people in developing countries with no other insurance options.
How the Global Goals are addressed
No Poverty
In a study of 15 African countries, 30% of all households financed out-of-pocket health expenditure by borrowing and selling assets. With MicroEnsure poor households avoid falling further into poverty.
Good Health and Well-Being
MicroEnsure’s health insurance increases access to decent medical care for people who could otherwise not afford it.
Reduced Inequalities
Affordable health, life and disability insurance can serve as the buffer needed by poorer people to help them overcome inequalities in accessing basic services.
Partnerships for the Goals
MicroEnsure develops multiple partnerships with insurance companies and mobile carriers, with them aim of increasing access to essential financial services for the poor.
MicroEnsure
MicroEnsure creates innovative solutions to meet this untapped demand and expand insurance protection on an unprecedented scale.
Global Goals addressed
Developed in: Ghana, Kenya, & the UKDeployed: Africa & Asia
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Empowering Women through Insurance
Nibedita from Green Delta Insurance is a one stop insurance solution for safeguarding women’s economic security, personal safety and healthcare needs.
Green Delta Insurance have created Nibedita, a complete service covering female insurance and safety needs in Bangladesh. They have achieved this through a combination of broad insurance options tailormade for Bangladeshi women, a digital platform with lifestyle and healthcare information, and a mobile app that can be used in times of emergency. The app contains a panic button, which sends instant messages to friends, family and law enforcement agencies regarding the user’s whereabouts and a request for immediate help. Green Delta Insurance’s comprehensive scheme is the first female-targeted insurance product in South Asia.
Why you should care
Bangladesh’s economic growth has brought an accompanied rise in the involvement of women in the economy, which has also created new gender equality challenges. Nibedita aims to empower women throughout the country with insurance coverage and healthcare information, as well as with additional financial support including trauma allowance in case of rape, road bully, robbery, acid attacks and natural disaster cover.
How the Global Goals are addressed
Good Health and Well-Being
The Nibedita health insurance scheme offers a safety net for Bangladeshi women, who are becoming more involved in the country’s growing economy.
Gender Equality
Green Delta Insurance believe that empowering women is a prerequisite for socio-economic development of a country, and provide tailor-made packages for Bangladeshi women.
Green Delta Insurance Company Limited
Green Delta Insurance Company Limited (GDIC) is a private non-life insurance company in Bangladesh.
Global Goals addressed
Developed in: BangladeshDeployed: Bangladesh
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Hanne Iversen Rye - Driving sustainable development at community level
by Joachim Marc Christensen
SpareBank 1 is Norway’s second largest finance group in terms of assets, and the banks in the SpareBank 1 Alliance are located all over Norway.
Even though the alliance consists of 14 independent savings banks, corporate responsibility is of essence in all. Deeply rooted in local communities, it is important for SpareBank 1 to develop close partnerships with local businesses, not only offering services and counselling, but also supporting local initiatives.
Recognizing the urgency of solving some of the world’s biggest challenges, SpareBank 1 is increasingly focusing on sustainability in all its operations. In the coming years the alliance is determined to redefine how financial institutions can help achieve the Sustainable Development Goals (SDGs), and rethink internal processes and product development. That is also the main reason why SpareBank 1 has become a sponsor of the Global Opportunity Explorer.
We got a hold of the Head of Sustainability at SpareBank 1 Insurance, Hanne Iversen Rye, to learn more about SpareBank 1’s vision for the future, and how the alliance works with the SDGs.
How big is the role of financial institutions in reaching the SDGs?
Financial institutions must allocate capital to necessary technology development and infrastructure and help finance replacement of inefficient and polluting production processes with cleaner technology. Additionally, financial institutions can play a role in reducing inequalities, by providing access to financial services (loans and insurance) and counselling to support individuals. SpareBank 1 also finances major investments of private customers, replaces damaged goods and rebuilds houses after fire. This means that we are in dialogue with customers at points in their lives where they have to make important decisions with a potentially major sustainability impact. We think financial institutions have a role to play in educating customers about more sustainable solutions and in creating a market for sustainable products.
What are the benefits for SpareBank 1 of integrating the SDGs into its business strategy?
SpareBank 1 wants to be a part of the new economy and understand both the risks we are exposed to and the business opportunities ahead of us. As an insurer we are directly experiencing the impact of extreme weather events, such as the storms and floods in Norway in recent years. With strong roots in local communities all around Norway, it is a priority for us to drive sustainable development at a local and community level.
One of the biggest challenges for startups featured on the Explorer is getting loans and investments. How can financial institutions make this easier?
The startup phase involves high risks, and regulations and fiduciary duty are both factors that bar, for instance, insurers or pension providers from getting involved. Yet there is a potential for private and public institutions to join forces to increase funding. Public institutions can contribute by offering risk capital and consequently change the risk profile of the investment to fit private institutions with limited risk budgets. Financial institutions also differs; some can be involved in early phases while others can play a part at a later stage – for instance by contributing to developing a market for products. However, in Norway, it has also been argued that available finance is not the problem; what is missing is contact between investors and entrepreneurs, and sufficient knowledge about finance opportunities.
How can a financial institution contribute to sustainability and still provide its stakeholders with good financial results? How is SpareBank 1 balancing sustainability and profitability?
We sincerely believe that sustainability and profitability go hand in hand. Sustainability is a way of doing business, not something that comes in addition to core activities. Organizational initiatives should make sense from environmental, social and financial points of views. Environmental benefits are often connected with cost reductions, for instance in energy efficient property management. However, the opportunity to make a major positive impact and create business opportunities comes by taking it further – by integrating sustainability into new product and service development.
Extreme weather events in recent months have revealed the urgency of climate adaptation in our cities. How can financial institutions help?
Most directly, we can influence standards when we rebuild, and share knowledge on how to build with techniques and materials that can withstand changing conditions. Institutions can also go in dialogue with local governments to help take city planning to a more sustainable direction.
Smart car insurance has become a priority for SpareBank 1. How does it work and how does it make our roads safer?
Smart Car Insurance is all about motivating and encouraging safe and sustainable behavior on the road, rewarded through a pricing structure. Safe-driving with flow will lead to a price reduction. Huge amounts of data on driving patterns are used to identify a safe driving style with reduced risk of accidents. A similar driving style may also reduce the carbon footprint. How safe and sustainable the driving is, will be monitored through the SPINN app connected to the Smart Car Insurance technology. Almost every second Norwegian driver (47%) reports to be interested in an insurance product where safe driving is rewarded. There is also a huge interest in development of other categories of Smart Insurance products, such as Smart Home, Smart Life and Smart Health Insurance.
What would you say to other business leaders who are hesitant about making the SDGs part of their business strategy?
Businesses were presented with a great opportunity when the SDGs were agreed upon and the direction for society and business were outlined. Corporations that understand how to deliver on the goals will also have products that will be asked for. The task of achieving the SDGs is daunting, and in many areas we are not on track yet. We need to join forces to get there.
In a perfect world, in what ways do you see SpareBank 1 leading in sustainability in the future?
I think that the Smart Insurance concept and a focus on green financial product development can bring SpareBank 1, our customers and the communities in which we operate to very exciting places. And there is only one place to be – a world where we can tick off all the SDGs!
SpareBank 1 is a sponsor of the Global Opportunity Explorer. Read more about their work via their website.