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In the insurance industry, the topic of sustainability (ESG – environmental, social, governance) is becoming increasingly important and is currently the subject of controversial debate. There are many reasons for this:
- Customers are increasingly including sustainability aspects in their purchasing decisions. Among other things, they look at the sustainability of investments in life insurance products or the social commitment of an insurance company. A clear sustainability profile will gradually develop into a real competitive advantage in sales.
- Regulatory requirements regarding sustainability are increasing. BaFin has defined requirements for dealing with sustainability risks in insurance companies. In addition, the Disclosure and Taxonomy Regulations impose extensive, also quantitative, reporting obligations on the industry which mainly concern capital investment.
- Policymakers are attaching increasing importance to the topic of sustainability and appeal to companies to take a critical look at the issue. Companies that lack a certain stringency and vigilance on the subject are publicly attacked and must fear reputational damage.
The consistent consideration of the concept of sustainability in an insurer’s business model is therefore a highly complex matter and touches almost all relevant areas of the company.
It is the decision-makers’ responsibility to identify the ESG fields of action that appear to be most urgent and critical for their own company. Those who have not yet started their concept development and planning, should not lose any more time.
ESG-Strategie
Den Ausgangspunkt der Ableitung einer Nachhaltigkeitsstrategie bildet eine ESG-Bestandsaufnahme. Bei dieser Positionsbestimmung unterstützen wir mit dem zeb-Nachhaltigkeits-Framework gerne. Daneben helfen wir bei der Bestimmung des individuellen ESG-Ambitionsniveaus und der Festlegung strategischer Leitplanken. In der Folge ergeben sich priorisierte ESG-Handlungsfelder und –Maßnahmen.
Integration of ESG in risk management and control
For insurers, ESG risks must be integrated into existing risk management processes. In addition to a technical concept, this includes mapping sustainability risks in (existing) software solutions and ensuring appropriate risk governance.
It is also advisable to include key sustainability indicators in the management of insurance companies. We provide support in defining suitable ESG KPIs, in considering drill-down logic, in defining responsibilities and processes and in consolidating and ensuring the quality of ESG data.
Sustainability in capital investment
Insurers must integrate ESG criteria appropriately into their investment process. Insurers can choose from various approaches such as exclusions, best-in-class or impact investing. Insurers should ensure that the sustainable development of investments is profit-oriented, i.e. that return, risk and sustainability are not in conflict.
A major challenge in capital investment is the availability and quality of ESG data. We help our clients to select suitable ESG rating agencies and data providers and to consolidate this data into a target-oriented data landscape.
ESG reporting requirements
Credible communication of own ESG efforts to customers, shareholders, regulators and the public is of high importance. We help insurers to ensure regulatory compliance with regard to the extensive sustainability requirements. Among other things, we take into account the requirements of the EU Disclosure Regulation, the Taxonomy Regulation and the new EU standard for sustainability reporting (CSRD). We also provide support in the concrete implementation of these regulations, i.e. the precise recording, consolidation and summarization of the required data.
Sustainable sales models
Sustainability now also plays an important role in discussions between brokers and customers, not least due to the further development of the Insurance Distribution Directive (IDD).
We support insurers in setting up resource-saving, digital sales and in motivating the sales organization to sell more sustainable insurance products. We are also happy to talk to our clients about innovative insurance products that help to reduce climate change and make it possible to adapt to climate change.
ESG in Personnel & Culture
When transforming an insurer into a sustainable company, employees need to be involved. With targeted measures such as surveys and coaching, we help to further develop a corporate culture that focuses on sustainability.
We also advise insurers on the sustainable positioning of their HR policy. This includes concepts in the areas of work-life balance, smart working and diversity.
