AG Insurance has expanded its sustainable offering with the launch of AG Target+ USD Climate Care 2026 in Belgium. The eight-year, capital protected product is available as a life-insurance contract (Class 23) and participates 160% in the positive performance of the Ethical Europe Climate Care Index, which is calculated and distributed by Solactive. The assets of the net premiums of the product are fully invested in a medium-term note issued via BNP Paribas Fortis Funding, the Luxemburg domiciled vehicle of BNP Paribas Fortis (which in turn acts as the guarantor).

Sustainable investing is becoming main stream and AG Insurance believes that an SRI approach can offer added value, according to Nicolas Nizet (pictured), product manager, market development invest, AG Insurance. "We receive more and more questions about our SRI investments and also about the corporate social responsibility of AG Insurance itself," said Nizet adding that the insurer is currently creating new reports on this topic in order to better inform its clients.

"In the near future all our investments will have an element of sustainability. We clearly go in this direction," said Nizet. "For example, all our funds - and not just the SRI ones - have to respect a Financial Embargo Policy List, according to which we cannot invest in countries which do not respect the international rules aimed at fighting money laundering, financing terrorism and the proliferation of weapons. We also don't work with companies, jurisdictions, countries, entities that are subject to specific international sanctions. And I think that it's just a beginning."

The demand for sustainable investing is not just the case at AG Insurance, according to Nizet. "For example, our partner, BNP Paribas Fortis, made it clear to us that they prefer to work with SRI investments," said Nizet.

The Ethical Europe Climate Care Index consist of shares of 30 large European companies selected by Solactive from a universe of the 600 most important European stock market capitalisations. The companies in the index are chosen based on their carbon footprint and - because that criterion is not sufficient in itself to slow down climate change in the long term - the efficiency of their energy transition strategy. Financial and environmental, social and governance (ESG) criteria are also applied.

"This index clearly respects this [SRI] topic because its investment strategy selects companies with both high ESG standards and the strongest energy transition strategy," said Nizet who acknowledged the index has other important advantages too. "First, it provides good financial conditions. If you have a SRI approach without good financial conditions I don't think that this would go through our filter. Finally, this is an index provided by BNP Paribas Fortis and for our USD solutions, we only work with this counterparty."

AG Insurance launched 27 Class 23 wrapped structured products with combined sales of €325m in 2017, according to SRP data. The insurer has three different product ranges, each with their own distribution channel.

The Smart Invest Bon series, which is distributed via the BNP Paribas Fortis channel, was the most popular among Belgian investors last year, collecting more than €260m from 11 products in 2017, including Smart Invest Bon Europe ESG Leaders 2027/3 which sold €43m during its subscription period. The Post Optima series (€37m from seven products) is distributed via BPost Bank's network of post offices while the AG Target+ series (€25m from nine products) is distributed via the insurers own brokerage channel.

Click the link to view the Ethical Europe Climate Care Index guideline and the latest factsheet.

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