Underwriting Challenge

• September 2019
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Incorporating environmental, social and governance risk factors into an insurer's underwriting process remains a challenge in the near term. This conundrum is far more pronounced for lesser insurers that have to traverse the various standards and frameworks pertaining to ESG. Adopting these standards and frameworks could be both a time consuming and costly affair. There is no denying that managing an insurer's ESG risk over the long-term yields sustainable returns and builds investor confidence, however management has to balance this with delivering profitable performance. The question remains on how stringently will the ESG principles be applied by an insurer in arriving at a decision to accept or reject a client. This retrospectively begets the question: By rejecting a client, did I miss out on a key business opportunity or did I succeed in avoiding a major risk?

Affryll Teo

Senior Manager, Investor Relations

Tune Protect Group

Damansara Heights

Kuala Lumpur, Malaysia