Insurance principles floatedNovember 2009
Work could soon begin on United Nations-backed ‘principles for sustainable insurance’ created for the global insurance industry.
The idea for the principles has been floated by the UN Environment Programme’s Finance Initiative (Unepfi), which was instrumental in producing the UN’s Principles for Responsible Investment (PRI) in 2006.
Unepfi suggested the move at its annual global roundtable in Cape Town last month, maintaining they would provide a much-needed ‘global sustainability framework’ for insurance companies and might galvanize the industry into action.
It said the principles should be along similar lines to the PRI, which commits signatories to consider corporate responsibility in investment decisions.
A new Unepfi study says the $4.2trillion (£2.6tn) insurance industry pays too little attention to sustainability issues even though they present a ‘substantial and pervasive’ risk to the sector.
Its survey of more than 200 senior insurance industry executives around the globe, including many chief underwriting officers, found that only about a third felt environmental, social and governance factors influenced their underwriting.
Similarly, only a third systematically analysed, integrated and managed the risks in areas such as product development, claims management, sales and marketing, underwriting and investment.
The proposal for a set of principles for sustainable insurance has partly come from a Unepfi working group on insurance which includes representatives from 18 global insurance companies, including Allianz, Axa, and Swiss Re.
An investment management company that was de-listed from the PRI has been readmitted after successfully completing the initiative’s annual reporting and assessment process. Cape Town-based Oasis Asset Management was one of five signatories de-listed in August for failing to take part in the mandatory process (EP11, issue 4, p8). The other four are still de-listed.
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