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Home > Databases > Library > Managing Environmental, Social and Governance Risks in Non-life Insurance Business

Managing Environmental, Social and Governance Risks in Non-life Insurance Business

June 2020
Source: 
United Nations Environment Finance Initiative (UNEP FI), Principles for Sustainable Insurance (PSI)
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The guide is one of the flagship projects of UNEP’s Principles for Sustainable Insurance Initiative (PSI), the largest collaboration between the UN and the global insurance industry. Developing the guide was co-led by the global insurer, Allianz, and UNEP, and involved other leading insurers, insurance associations, and academic institutions from across the globe.

The guide outlines 8 areas comprising possible actions for insurers to manage ESG risks—also known as sustainability risks—in non-life insurance transactions, focus on risk assessment and insurance underwriting. These areas include developing a company’s ESG approach and risk appetite, integrating ESG issues into the organisation, establishing roles and responsibilities for ESG issues, escalating ESG risks to decision-makers, detecting and analysing ESG risks, and decision-making and reporting on ESG risks.

ESG risks can vary by country or region, line of business, type of cover, economic sectors, client characteristics, over time, and due to other factors. The guide helps draw attention to this complex range of considerations and how some industry participants are going about their integration of ESG risk factors into non-life risk assessment and underwriting.

The aims of this guide are to:

  • 1. Provide optional guidance to insurance industry participants in developing approaches to assess ESG risks in non-life insurance business transactions, particularly industrial and commercial insurance business
  • 2. Support clients, intermediaries and other stakeholders in facilitating ESG-related information which might be required during the ESG due diligence of transactions
  • 3. Highlight the materiality of ESG risks to various lines of business and economic sectors, including characteristics which might affect the ability to assess and mitigate such risks
  • 4. Address growing concerns by stakeholders across society (e.g. NGOs, investors, governments) on ESG risks and articulate the peculiarities of the insurance business
  • 5. Demonstrate the valuable role the insurance industry plays in the global economy and society, and strengthen the industry’s contribution to sustainable development 
Read Oline
Themes: 
Environmental, Social and Governance (ESG), Impact Investment
Key search terms: 
non-life insurance business, sustainable insurance, ESG approach

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