02 Mar 2021
In an industry that has seen substantial changes in a short period of time, there is one area of insurance that has really come to the foreground–the increasing importance of environmental, social and governance (ESG) considerations to insurers.
To its credit, sustainability is an area that the insurance industry has been proactively addressing for some time. In 2012, the United Nations Environment Programme Finance Initiative Principles for Sustainable Insurance were implemented to ensure environmental, social and governance issues in insurance decision-making, and the sector has been making solid progress in the years since.
But what does sustainable insurance really mean? And what will sustainable insurance look like in the years to come?
Sustainability in the industry means identifying the insurance requirements, asset management products and advisory services that aid peoples’ lives and help them to manage risks, while also making a positive environmental impact or indeed, directly addressing climate-related issues. Doing so will support the continual transition to a low carbon economy and protect customers from any negative effects stemming from climate change.
But it also means people, and building a better world for them. The World Bank and OECD estimate that the emerging consumers market–which includes people living in developing countries in Asia, Africa and Latin America–has a potential 3.7 billion customers. This is where a progressive, forward-thinking international organisation such as ADNIC is in an apt position to be able to drive sustainability in the insurance sector.
However, it is imperative that sustainable practices become adopted industry-wide–something Butch Bacani, the programme leader at the United Nations Environment Programme Finance Initiative’s Principles for Sustainable Insurance, is a great believer in. By doing that, he says, insurers can “be part of the solution to building healthy, resilient and sustainable communities and economies”.