ESG in the Insurance Sector: Growth, Opportunities and Risks
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- ESG issues are critical to the asset and liability components of (re)insurers’ balance sheets through consideration and placement of risk and the value of their investment portfolios. A failure to take ESG factors into account may significantly impair (re)insurers’ ability to derive profits on policies and investments, and their ability to attract the growing number of ESG-minded retail and commercial consumers.
- As governments and supra-national agencies take increasing action on ESG issues, such as with the EU Regulation on Sustainability-Related Disclosures in the Financial Services Sector coming into force on 10 March 2021, international (re)insurance groups need to be mindful of the increasingly divergent regulatory regimes, compliance with which may represent a significant cost.