From the Editor's Desk
Regulators and Activists Increase Pressure to Incorporate ESG in All Areas of Insurance
This issue also includes a look at AM Best’s first Student Challenge and a listing of the largest insurers in the Asia-Pacific region.
- Patricia Vowinkel
- May 2021
Environmental, social and governance issues have become a hot topic within the insurance sector.
In 2020 ESG turned up 17 times in a search of AM Best's news wire, up from just five references in 2018, for instance. As of mid-April, ESG came up nine times, putting 2021 on track to far exceed 2020 numbers. While an imprecise measure, our search experiment demonstrates how interest in the topic is growing. We are in good company with this view.
“What was a fad and a trend seems to be much more than a fad and a trend now,” according to Ross Webber, managing director, Bermuda, at Apex.
Webber was one of the industry experts interviewed for “The Greening of Insurance Asset Management,” an AM Best TV and Best's Review joint project. In this special presentation, which aired on AM Best TV in April, discussions centered on how the insurance asset management sector is adapting to meet emerging standards and expectations for values-based investing.
The issues go beyond insurer investment and asset management practices. Regulators, legislators, activists and other stakeholders are applying significant pressure to insurers to incorporate ESG in all areas of business.
To reach a broad spectrum of perspectives, we also spoke with Chris Fowle, director of the Americas for PRI – Principles for Responsible Investment; Mike Kreidler, Washington state insurance commissioner; David Altmaier, Florida insurance commissioner and president of the NAIC; Grace Vandecruze, managing director, Grace Global Capital, and others.
While the industry has focused on the environmental side of the equation for some time, some experts noted that the social element is gaining more attention. Related, AM Best in March became a signatory to the United Nations Environment Programme's FI Principles for Sustainable Insurance (PSI).
The special presentation in Best's Review includes three articles: “The Push for Responsible Investing,” “The Changing Relationship Between Asset Management, Values-Based Investing and Diversity and Inclusion” and “Smaller and Midsized Insurers Negotiate a Complex Investment Landscape.” Also included in the Best's Review package is “Beware the Sirens of Environmental, Social and Governance Investing,” from Nir Kossovsky, CEO of Steel City Re, and Denise Williamee, Steel City Re's vice president of Corporate Services.
The May issue also looks at AM Best's inaugural Student Challenge that had risk management and insurance students create innovative solutions for catastrophe risk. AM Best announced the winners on March 17.
As the COVID-19 pandemic enters its second year, life insurers are facing some new questions. Best's Review delves into this in “Life Insurers Ponder How to Underwrite COVID-19 Survivors.”
And in “Hong Kong Insurance Regulator Launches Groupwide Supervision Rule,” we include a listing of the largest insurers in the Asia-Pacific region.