Some of the world’s largest insurance and reinsurance companies will meet next week in the Swiss town of Rüschlikon to finalise the Principles for Sustainable Insurance (PSI), a UNPRI equivalent for ESG integration into the insurance sector. The four principles, which are similar to those of the six principles of the UNPRI, include signing up to look at integrating ESG issues into insurance business lines and promoting ESG across the insurance industry. Members of the working group that have been developing the principles include Munich Re, AXA, Allianz, Swiss Re, Tokio Marine & Nichido Fire Insurance. The principles, which will be formally launched after the Rüschlikon meeting, have the same genesis as the UNPRI. They were developed under the auspices of the United Nations Environment Programme Finance Initiative’s (UNEP FI) Insurance Commission, which comprises leading insurers and reinsurers committed to systematically considering environmental, social and governance (ESG) issues in their business principles, strategies and operations. Astrid Zwick, Head of Corporate Responsibility at Munich Re and Chair of the PSI working group, said the insurance principles differed from the UNPRI in looking at insurance-specific areas such as casualty and property insurance risk but also at areas for insurance premium development such as for project financing in the environmental space. Zwick was speaking (November 28) at the Novethic conference inParis. She cited the President & Chief Executive Officer of a North American insurance company to explain the rationale for the PSI: “We are convinced that sound [ESG] behaviours and practices lead to reduced exposure over time and therefore should be reflected in the insurance relationship.” The development of the Principles for Sustainable Insurance has involved a global consultation process amongst insurers, which reached its sixth and final leg in Asia on the 10th and 11th of November in Tokyo, Japan hosted by Tokio Marine & Nichido Fire Insurance and supported by Mitsui Sumitomo Insurance, Sompo Japan Insurance and The General Insurance Association of Japan.
The proposed Principles for Sustainable Insurance are:
- We will systematically consider ESG issues in our business principles, strategies and operations.
- We will engage with insurance industry participants to raise awareness on ESG issues, reduce risk and develop solutions.
- We will work together with society to enhance our effectiveness in implementing the Principles.
- We will be transparent by reporting on our progress and activities in implementing the Principles.