ESG in 2023: measuring, reporting and taking action

Ali Smedley

Climate Risk is InsTech’s monthly newsletter dedicated to climate-related insurance news - you can sign up for free here.

ESG in 2023: measuring, reporting and taking action

We are confident you need no reminder that managing and measuring the impacts of climate change will remain a top priority for insurers over 2023. Insurers are facing pressures from multiple sources including investors, underwriting regulation and the threat of increased liability litigation.

Physical risk is one of the most well-known areas impacted by climate change, but it is an area where insurers already have some of the best experience out of any industry in assessing catastrophic loss potential. The transition risk caused by the move to insuring new assets and withdrawing from activities with a high carbon footprint has many challenges, but also opportunities for insurers that show leadership in this area.

Whilst measuring and reporting on climate impact will continue to be important, over 2023 we expect to see insurers taking more action on the opportunities that arise when moving to a less carbon-intensive economy. This will include new products for renewable assets and more supplementary climate risk management services.

ESG and climate risk will remain a key theme for InsTech in 2023, so keep an eye out for events and articles covering a range of topics in these areas. In the meantime, you can watch the highlights from our last event of 2023 focusing on practical applications for managing and measuring carbon emissions here.

Live Chat, 9th February: Insights from the World Economic Forum 2023

Parametric insurance models have an increasingly important role in creating a sustainable world with solutions that extend into climate, agricultural stability and clean energy. With speakers from Chainlink, Mastercard and Etherisc, this session will look at how blockchain, smart contracts and third-party data are being used to develop a range of innovative insurance solutions focused on sustainability, ESG, climate and the carbon market. There are a number of sessions and announcements on this subject planned for the World Economic Forum in January 2023.

Wenalyze: SME insurers - is nearly half of your data inaccurate?

Wenalyze aggregates third-party data sources to help commercial insurers validate, update and enrich data about their clients. In this interview, InsTech’s Henry Gale speaks to Roger Ferrandis, Co-founder and COO of Wenalyze, about insuring small and medium-sized businesses (SMEs), poor-quality data and how open data can provide insurers with new insights into their clients.

In the news…

Geosite and Previsico partner for US flood prediction and loss mitigation

Previsico’s solution will provide Geosite’s US insurance clients with live flood alerts, so they can work with their customers ahead of events to mitigate flood losses. Previsico’s real-time flood forecasts, updated every three hours with projected flood depths, are already used by insurers including Zurich, Liberty and Generali. To learn more about how Geosite partners with companies like Previsico, read our recent interview with Rachel Olney, Geosite’s founder and CEO.

Lloyd’s Lab: European climate solutions to be a focus for Cohort 10

Applications for the tenth cohort of the Lloyd’s Lab are now open, with “European Cyber & Climate Solutions” being one of the three themes. Submissions to this theme could include new products that support green technologies or solutions for understanding European flood and wind risk. The other two themes are “Data & Models” and “New Products”, which could include technologies which help insurers quantify the exposure to new types of risk, such as the transition to a low-carbon economy.

Chubb launches global climate business unit

The new business unit will see expanded appetite and additional tailored insurance products provided to businesses focused on new technologies that will help the transition to a lower carbon economy. It will also provide risk management and resiliency services to help clients manage the impact of climate change.

WTW study finds risk managers have a key role to play in developing ESG strategies

WTW’s 2022 ESG Global Risk Managers Survey found that more than half of the 312 corporate risk managers surveyed are significantly involved in their organisation’s ESG efforts. 74% of survey respondents also said improving their company’s ESG score is a core focus for their business. However, while most risk managers say their organisations have ESG goals, only 17% have documented targets with clear milestones for ESG risks.

dClimate launches climate data marketplace

The decentralised data marketplace will enable users to easily retrieve existing data sets from dClimate as well as other data sets from a range of partners. The company will soon ingest data from the Oasis Hub marketplace, which it acquired in September 2022. Companies, governments and academics are also able to upload their data to the marketplace.

PwC: a winter flood could cost insurers up to £1.6bn

New analysis by PwC shows that a flood as extensive as 2015’s Storm Desmond, Eva or Frank would result in insurance losses of over £1.6 billion in today’s terms. The figures come following the significant impact of Storm Eunice in February 2022, which saw estimated insurance losses of £200 million to £350 million.

Webinar: Insurance use cases for Fathom’s Global Flood Map

In October 2022, Fathom released Fathom-Global 3.0, a flood map which includes inland fluvial, pluvial and coastal flood risk data. Users of the new map can quantify and mitigate flood risk, as well as understand changes in risk under future climate scenarios. In this webinar, Fathom will further discuss the use cases this new Global Flood Map addresses for the (re)insurance market.

CoreLogic launches new climate risk analytics for real estate

The new solution combines property data with financial information to estimate and mitigate the impact and cost of future catastrophes, initially through to 2050. The solution provides risk scores for every US property with a breakdown for each peril and each risk’s financial impact. The solution is built on Google Cloud’s infrastructure and has been designed to help government agencies and real estate companies.

Allianz launches dedicated ESG organisation

Allianz Global Corporate & Specialty (AGCS) has established an in-house organisation for ESG activities. It will focus on AGCS’ sustainability strategy and intends to work with all lines of business to develop new insurance solutions, including market opportunities in renewable energy, low-carbon technology, sustainable construction and transport. The ESG organisation will also work on decarbonising AGCS’s own insurance portfolio over the coming decades in line with the company’s Net-Zero Insurance Alliance (NZIA) membership.

Guidewire: 70% of UK insurance customers think insurers have a responsibility to tackle climate change

In 2022, Guidewire commissioned insurance-focused surveys in France, Germany, Spain and the UK to gather the opinions of insurance customers. Insureds in all countries believe that insurers should be acting on climate change, but consumers in the UK are less willing to assume increased costs than their counterparts in other European countries. Insureds in the UK are at least 13% less likely to buy an eco-insurance policy than in other countries, whereby the policy is more expensive and the extra money is used to offset carbon emissions incurred during the insured activity.

InsurLab Germany Accelerator Programme - sustainability solutions to be a focus

Applications are open to all start-ups working in the insurance space. The programme offers individual mentoring and close collaboration with member companies and industry experts. InsurLab is looking for insurance solutions in various areas including sustainability, which can include tools for measuring ESG impact and reporting solutions.