Ep201 Natalia Dorfman & James Kench of Kita: Gross Written Carbon

Most of my interviewees are good at using insurance to solve problems, but today’s guests Natalia Dorfman and James Kench of Lloyd’s Lab Alumnus Kita are taking this to a whole new level.

This is because the problem Kita wants to help solve is what most would say is the biggest of our generation: Climate change.

Kita’s still going to do this by solving client problems and making underwriting profits but it is inventing a whole new class of insurance to do so.

Carbon credits are key to the world hitting its 2050 net zero targets, but as a major and highly valuable asset they need high quality insurance to be able to scale up at the speed that is needed if a meaningful positive climate impact is to be made.

If we think of a carbon credit in its simplest terms as a physical asset like a forest that has been planted to take carbon dioxide out of the atmosphere, the amount of things that could go wrong is enormous.

The trees could burn down or blow over or die from drought, pests or disease. The grower might go bust or run off with your money and not plant anything.

Your carbon credit could be nationalised by a foreign government, or it could be wiped out by a change in the methodologies of those who calculate these things or it could just turn out that the trees you have planted might not sequester as much carbon as expected.

There’s a lot of moving parts and my example is the simplest of many increasing complex and technical solutions.

If we are to make a big dent in climate change we are going to need to scale a currently tiny industry many hundred times so that it grows as big as the Oil and Gas sector is today.

That’s where the multiplying effect of insurance comes in. If a project is insured, a fund might be able to buy into three projects instead of one and a bank will be able to lend much more using the same amount of capital.

By finding out what could go wrong the hard way Insurance also helps spread best practice and adds another layer of due diligence.

Whichever way you look at it, what Natalia and James are building is one of the most exciting new classes of insurance to emerge since cyber.

And it’s the good kind – insurance with a strong moral purpose, so any profits can come guilt-free.

Natalia and James are really impressive and I think you’ll find this podcast informative and inspiring.

Half and hour with these two and you’ll have a spring in your step and you’ll be recommending a career in insurance to every young person that you meet.

NOTES:
Here’s the link to the report we mention. This is well worth a read: https://resources.oxbowpartners.com/hubfs/202402%20Kita%20%20Oxbow%20Partners%20-%20Gross%20Written%20Carbon%20Report%20(05.02.24).pdf

Natalia and James can be contacted at https://www.kita.earth/

LINKS:
We thank our naming sponsor AdvantageGo:
https://www.advantagego.com/