Fireman's Fund Presentation

It Pays to Be Nice Mills College April 10, 2009 Stephen Bushnell Senior Director – Emerging Industries

It Pays to Be Nice – Insurance and the Environment Corporate Social Responsibility is not a new concept Fireman’s Fund founded in 1863 with a social mission to support the fire service Commitment renewed in 2004 through Heritage Program Provides equipment, training and community education programs to fire departments around the country $20,000,000 in donations by October 2008 Examples - Alameda County Fire Chiefs Assn – Fire safety house trailer $55,000 - Oakland Ca FD - CORE public education program $100,000 - Rescue equipment $12,000 - Hazmat equipment $10,000 © Copyright Allianz 4/16/2009 2 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Allianz, (Fireman’s Fund Parent) Allianz for Good program MicroInsurance - Allianz offers microinsurance to communities in emerging economies and developing countries where people are often most vulnerable to risks such as natural disasters, illness and disease, and where there is little or no social security. Microinsurance can help these people to invest in their livelihoods, respond to unforeseen events and plan for their future. Environmental Management - Being one of the largest global financial services providers, we know that our operations have an impact on the environment. Climate Change - Allianz Climate Solutions - WWF Partnership - Climate change Center of Competency © Copyright Allianz 4/16/2009 3 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Fireman’s Fund and Green Buildings In 2006 launched the first insurance coverage for Green Buildings Certified Green Building Coverage - Discount - Broadened coverage to protect investment - Post-loss provisions Green Upgrade Coverage - “Green” a building after loss - Post-loss provisions Sustainable practices consulting - Help customers become greener © Copyright Allianz 4/16/2009 4 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment What are Green Buildings? Energy and water efficient Healthy and occupant friendly Daylighting Low carbon footprint © Copyright Allianz 4/16/2009 5 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Commercial Green Buildings are “certified” by two organizations. Both organizations certify buildings based on a set of construction and operational criteria. Both have four levels of certification. • USGBC •GBI © Copyright Allianz 4/16/2009 6 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Why is the insurance industry interested in Green Buildings? Profound value proposition; businesses can improve cash flow, operating income and asset value by going green Green buildings are moving into mainstream Green buildings are better risks © Copyright Allianz 4/16/2009 7 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Why is the insurance industry interested in Green Buildings? Property/casualty insurance companies are experts in risk management Insurance industry has historically taken a leading role in new trends in technology and safety Customer demand © Copyright Allianz 4/16/2009 8 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Climate change poses tremendous risks to the world, the environment, the economy and the insurance industry. Green buildings reduce Greenhouse Gas (GHG) emissions. Allianz/WWF Climate Change Report addresses this issue in depth. Hurricane Flood Drought Wild Fire Changing weather patterns © Copyright Allianz 4/16/2009 9 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Green Buildings are unique: No trade-offs Environment issues often produce winners and losers Everyone wins with green buildings - Profound economic value proposition for building owners - Documented bottom line and employee satisfaction gains - Public - Increased retail sales - Stronger student performance - Environmental benefits - Climate change - Public utilities - Economic stimulus - Companies with real green products © Copyright Allianz 4/16/2009 10 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Economic value proposition Buildings use 40% of US energy, including 70% of US electricity. They generate 38% of all US CO2 emissions Green buildings typically use 30% less energy. With alternative power devices can be close to net zero Significant energy savings can be realized at no or little cost through proactive facility management A 30% reduction in energy use results in a 5% increase in NOI (EPA data) Studies document - Higher rents for green space - Faster lease out and higher occupancy rates - Satisfied tenants - Higher resale value © Copyright Allianz 4/16/2009 11 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment More economic value When a business reduces energy use by 30% they lower operating costs by $25,000 for every 50,000 sq ft of office space. (EPA 2001) Green buildings use sustainable, recycled and healthy (low VOC) materials Improved indoor air quality, HVAC systems and daylighting in buildings results in reduced absenteeism and (perhaps) higher productivity © Copyright Allianz 4/16/2009 12 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Public “Energy efficiency measures have enabled California households to redirect expenditures toward other goods and services, creating about 1.5 million FTE jobs with a total payroll of over $45 billion, driven by well documented energy savings of $56 billion from 1972 to 2006.” Dr David Roland-Holst, UC Berkeley, Energy Efficiency, Innovation and Job Creation in California, October 2008 Retail Documented sales increases in green space (up to 40% increase Wal-mart Schools and test scores Documented increase in student test scores in green buildings © Copyright Allianz 4/16/2009 13 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Environment Buildings use 13.6% of all potable water (15 trillion gallons a year) Green techniques can reduce water consumption by 50% or more Buildings generate 38% of all waste in US Green buildings with a focus on recycling can reduce waste output by 90% Buildings use 40% of raw materials globally Green buildings often use recycled materials Designed for efficient material use Cradle to cradle philosophy © Copyright Allianz 4/16/2009 14 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Climate Change Buildings generate 38% of all US CO2 emissions Energy cost to move water - 3,200 kilowatt hours to move an acre of water (approximately 326,000 gallons) from Northern California to Southern California, the equivalence of using 9.8 watt-hours per gallon to move the water. Alternative energy promise (2030 challenge for net zero) Green materials – concrete Social and economic costs of climate change Utilities Conservation cheaper than new power plants Avoid desalinization plants Cap and Trade or Carbon Tax © Copyright Allianz 4/16/2009 15 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Economic Stimulus Green savings are reinvested “Energy efficiency measures have enabled California households to redirect expenditures toward other goods and services, creating about 1.5 million FTE jobs with a total payroll of over $45 billion, driven by well documented energy savings of $56 billion from 1972 to 2006.” Dr David Roland-Holst, UC Berkeley, Energy Efficiency, Innovation and Job Creation in California, October 2008 Green jobs and venture capital Obama stimulus plan and budget - Significant investment in energy efficiency and alternative energy © Copyright Allianz 4/16/2009 16 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Real green products Forward looking business see value in green - Greenwashing and the FTC Fireman’s Fund and Allianz recognition - GELA, EDF and others - DJ Sustainable index - Financial success - Sincere flattery © Copyright Allianz 4/16/2009 17 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Opportunities Green upgrade of existing buildings Impact of 30% energy reduction in 4.5 million commercial buildings and 160 million households? Climate change Economy Profit Environment Personal finances Impact of water conservation, waste reduction, resource conservation? © Copyright Allianz 4/16/2009 18 Filename or other information Name of the presentation

It Pays to Be Nice – Insurance and the Environment Triple Bottom Line ??? Green buildings benefit the bottom line, the occupants of the building and the environment People Profit Planet “Cool” from and environmentalists perspective, simplistic and perhaps naïve from the business point of view Clear that profit includes people and planet Single bottom line – people, profit and planet are all included in a sustainable dynamic Not only pays to be nice … it is a new imperative © Copyright Allianz 4/16/2009 19 Filename or other information Name of the presentation

Fireman's Fund Presentation

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