September 2008

Saving the green way

Tell me about the Green Guaranteed Account?

The product is a bank account with returns linked to the RBS Green Index which is essentially a basket of the thirty largest funds linked to the green industry. These could comprise things such as wind farms, biotechnology, hydroelectricity or solar energy. It is a new index but has so far performed strongly and is catching people's imagination as they increasingly look towards investing in the evolving green sector. We worked very closely with RBS in developing this product and so far we are the only company to offer it.

Investors put in a single premium which can be anything between £2,500 to £250,000 and the account runs for five years during which time the investor won't be able to withdraw their money. The capital invested will be protected and the investor benefits by receiving interest based on the performance of the index. The product operates in tranches. The last tranche application period ended on 21 July with the accounts operational from 25 July. The next tranche opens for applications on the 1st September.

Who is it aimed at?

The Green Guaranteed Account is targeted at no risk investors - those who want their capital to be protected but can afford to take a chance with the interest. Green issues are extremely topical right now and this product is a great way for investors to get exposure to these industries in a protected way.

How long did it take to develop?

The Green Guaranteed Account is essentially a bank account and because we have a bank we were able to develop this very quickly. It only takes us a matter of weeks to build a new structured product.

How can people access the Green Guaranteed Account?

The product can be accessed through advisers who will receive 3.25% commission. Advisers looking for more information should contact their Zurich consultant or dial 0500 546546.

How has it been received?

The product has been incredibly well received by those people who have seen it. However, it is still early days and we are still working with IFA networks to have the product included on their panels. These processes can take time as they are very robust but once we get through that then more people can be made aware of what the Green Guaranteed Account does.

What were the main challenges you faced in developing the account?

The main challenge has been how we can explain it to people so that they understand what risk they are taking and the nature of the capital guarantee. The contract is innovative and many advisers haven't even heard of the green index so the education process is extremely important.

Paul Wright
Investment Management Director – Proposition Management & Development
Zurich