Insurers have been placed once against front and centre in the drive for ESG in business but its reputation needs to be resuscitated if it is to deliver.
Amid spiralling energy costs, political pressure to be seen to be on track for their net zero targets, has created a situation where the (re)insurance sector is viewed, in an age where social media speak is increasingly seeping into all aspects of our day to day lives, as key influencers. It is believed they can use the carrot of lower premiums and the stick of withdrawal of covers to cajole policyholders to move to a sustainable operating model.
On paper it seems a sensible approach but as the military will say a plan, however good, rarely survives first contact.
Contact in this case being the inevitable reaction when the market looks to question their policyholders on their ESG credentials. This at a time when businesses are suffering. Costs are rising and quite honestly what little money they have in a contingency fund can find a myriad of homes other than ESG.
All too often the response will be “those in glass houses should not throw stones”. The industry is still wrestling with the severe reputational damage caused by the BI claims debacle during COVID. It is still seen as looking to walk away when their policyholders needed it most and is now only begrudgingly making payments after being hauled through the courts by the FCA.
It is not nice. It might be far from the truth but it is the current reality of public perception. Putting reputation aside media coverage of the ongoing battles between major (re)insurers and climate campaigners over the underwriting of fossil fuel projects is not going away and has intensified this week with the publication of Lloyd’s updated ESG manifesto.
Coupled with that has been the UK’s most high profile female CEO, Aviva’s Amanda Blanc, taking to social media and the press to decry sexist remarks made at the firm’s AGM and warning that there is still too little diversity in the industry’s boardrooms.
There is a recognition that the industry does have a role to play, but there is also a recognition this will not be a short term strategy, and one which will need insurers to get their own houses in order before they can turn their attention to working with their clients to drive real and sustainable transition.
The question is will the politicians and with them the regulators share the same long term view, rather than press for headline grabbing, but short term quick wins?
Editor, Emerging Risks