Länsförsäkringar Recycle Insurance
Case story: A Swedish Insurance company – Länsförsäkringar – decided to take their responsibility in the business of production of stuff by simply helping manufacturers to calculate and cover the costs for recycling of the stuff produced. As a manufacturer within the EU, you were not allowed to sell products if you didn't take full financial responsibility for the recycling costs of the product and its packaging. It was called The Polluter Pays Principle. But how could they know what the costs would be in 5 to 20 years? How could they guarantee a sustainable coverage in the future? And what if they were not still an existing company at that day, who would pay for it then?
Turning a problem into an opportunity...
Länsförsäkringar put a price on recycling in the future – a cost nobody could know what it would be. They do it based on a similar risk scenario as the ones used within their regular risk estimates for insurances. Let's say you buy a microwave oven. Nobody can know what the cost will be to recycle all of its components in 5, 10 or 20 years time. But a small fee payed at the time of production will in the hands of Länsförsäkringar grow and cover the costs.
The arguments: A) Collecting many small fees makes a stable base for a starting capital. B) Interest on interest will secure growth. C) Growth of capital is progressive. D) We have 150 years of experience of making capital grow. E) The future capital gives us the possibility to guarantee the cost coverage of the recycling in the future. F) Trust – an insurance company operates under the control of governmental financial institutions.
Länsförsäkringar was ready to take the risk since they would do the same for many, many manufacturers of many many different products. By charging small fees at the time of the sale to a consumer, they collected many fees and made the money grow as the products were being worn out. When there was time to recycle it, there was already a budget "waiting" for to cover the recycling cost at that time.
Länsförsäkringar could ease out the variations in uncertain costs by scale, so to speak. And guarantee that each and every insured product would in fact have "saved money" enough to be recycled when that day came...
A brilliant thought. And a brilliant service that made global sense already back then.
We were invited in an early phase and created the strategic base for information and campaigns – copywriting was truly joyful and I admire the client for giving us so much free space and back up the work with a massive media budget.
The idea was initially intended to help smaller manufacturers, but the big ones jumped on the train more or less immediately. IBM Finance signed the world's first recycling insurance. Followed by Siemens and other international brands...
We made lots of marketing material and ads in different shapes and forms, printed on recycled paper of course, using the wild illustrations by talented artist Janne Grundberg.
Project Management: M Markstedt and B Bertoft
Idea, copy, design: B Bertoft
Illustrations: Janne Grundberg