Sustainability in the insurance community
Earlier this year, Ninety published their Sustainability in Insurance whitepaper. On the back of this paper, we thought that there was a lack of space and community looking at sustainability from an innovation perspective. This prompted us to set about creating a working group to specifically discuss sustainability in insurance issues, and, in June, we hosted the inaugural meeting with individuals from across the industry. We were aiming to give like-minded people a forum to exchange experiences, challenges and ideas.
At this event, we mostly discussed the challenges faced when considering the topic of sustainability in insurance. In this blog, we will share some of the outcomes discussed, in the hope that these will help any insurance innovators looking at this area.
First, we focused on what the key challenges are, as well as the obstacles that are preventing progress in achieving sustainability in insurance. The working group participants pointed to several key areas:
- Lack of data to understand the environmental impact risks and challenges for clients and customers that would allow underwriters to have confidence in risk assessment.
- Challenges in building a business case for the business, where sustainable initiatives can also bring financial growth.
- Lack of understanding and a common definition as to what ESG means for different stakeholders internally, but also to commercial insurance clients as well as retail customers.
- Exclusion of business, like underwriting fossil fuels, feels ‘easy’, but what are the opportunities that are being created in lieu of?
- Understanding the customer view on sustainability – is the customer ready to put their money where their mouth is?
- What sustainability means for the various business lines.
- What are the short-term and long-term needs that insurance has to fulfill to create a sustainable future?
- Bringing sustainability into the agenda and starting to look at scope 1 emissions for some insurers who are just starting to think about these issues.
- Focus on the E in ESG but a lack of holistic thinking – apart from G, which is widely understood by the industry already.
- The commercial challenge of competition not following the same rules as carriers focused on sustainability challenges.
- Regulations and investors demanding changes would create more momentum in the industry as these would come to the top of the agenda for all the boards.
- Building new business models that combine sustainability and profitability for insurance businesses.
- Management of insurance assets in a responsible way.
- Insurance is notorious for being reactive, but, on this topic, we need to become proactive.
- Being more vocal and create more thought leadership on the topic; share involvement and initiatives to create momentum and encourage others in the industry to take action.
As we can see, there are plenty of challenges and questions, but also opportunities in the E, S & G areas in the insurance space that innovation can help approach.
Out of all the sustainability issues, the most significant media attention these days is on climate change. There is a long way to go and much action to take in all industries, but we believe that insurance has a unique role to play in the change process as well.
If you want to be part of the conversation going forward, please let us know by emailing firstname.lastname@example.org.