ESG challenges in insurance

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Sustainability issues have evolved over the past years in many industries. Although the insurance sector is not closely associated with any of the sustainability dimensions, expectations may change rapidly. For example, insurance companies play a critical role in addressing the environmental and climate risk challenges as institutional investors (mainly life insurers and pension funds) and through claims settlement and indirect greenhouse gas emissions (non-life insurers). Thereby risk management and underwriting, product development and marketing, as well as operations and claims management functions are concerned. Climate change also comes with the risk of increased claims, for example, from natural catastrophes and thus impacts the insurers’ solvency. The evolution requires the attention of executive management and a clear roadmap towards “green” insurance. While environmental issues are relatively easy to measure, insurance also plays a fundamental role in society, among others, by offering affordable coverage and contributing to social welfare and equality. Ongoing research is interested in selected ESG dimensions as exemplified above.

L. Stricker, C. Pugnetti, J. Wagner, and A. Zeier Röschmann. Green Insurance: A Roadmap for Executive Management, Journal of Risk and Financial Management,15(5):221, 2022. https://doi.org/10.3390/jrfm15050221

A Systematic Literature Review on Sustainability Issues along the Value Chain in Insurance Companies and Pension Funds (with L. Aburto), Working Paper, 2023