Environmental, Social and Governance issues have undoubtedly become key priorities for (re)insurers. However, most action to date has focused on internal operations, regulatory requirements and the asset side of the balance sheet. The next step is for (re)insurers to start thinking about how they tackle, and indeed can benefit from, incorporating ESG into decision-making across their entire business, including underwriting.
ESG is still evolving and will be for the foreseeable future. (Re)Insurers must have a plan but they need to be flexible and ready to adapt to changes in industry trends and best practices as they occur. They need to be ready to meet the demands of their stakeholders and have an ESG strategy that is consistent with, and even stems from, their core business ethos, agenda, and strategy. They also need the data and analytics to enables this. (Re)Insurers that rise to this challenge can take advantage of being at the forefront of innovation for ESG. Their broad reach across sectors, provision of capital, and large balance sheets, ideally places them to invest in technology and other capabilities. This allows them to influence real change in corporate behavior and disclosures, in relation to sustainability.