The SIA has reported on the sector’s sustainability performance annually since 2020. This report relates to the activities of the SIA and the insurance industry in 2022. The current edition is available exclusively online:
Sustainability in the Swiss insurance industry
The role of insurers is to identify and minimise risk, develop innovative solutions for risk transfer and continue to improve performance through their business operations. Since risk sharing and precaution are intrinsic to their business models, they think long term and across generations.
The industry thus plays a major role in safeguarding the financial resilience of individuals and the economy, and contributes to environmental, economic and social sustainability. Environmental, social and governance (ESG) criteria feed into underwriting, investment decisions and collaboration with customers and other stakeholders. The result is that insurers are increasingly taking a holistic view in their activities and addressing ESG-related opportunities and risks in ways that support business growth, brand strengthening and sustainable development.
The insurance industry can make a decisive contribution in three key ways: Systematic integration of sustainability into their business models; support of the economic and social transformation towards net zero; adoption of transparency and collaborative approaches in relation to sustainability matters.
Connection of sustainability and business models
Insurers are increasingly concentrating on how they can apply targeted strategies, commensurate with their size and objectives, that promote forward thinking and sustainable action. The connection between ESG issues and the business model should encompass the entire value chain: From the customers it does business with, to investment of policyholders’ money, the partners and other stakeholders that it works with, and more sustainable ways of running its business. Responsible corporate management recognises ESG issues as an opportunity and uses them innovatively as a competitive advantage. With a clear vision, the transition to a climate-friendly economy can be achieved. Insurance industry leaders are therefore increasingly regarding sustainability as a decisive element in their growth strategies.
At a glance: Key sustainability figures of the insurance industry 2022
Support for environmental change
Many insurers incorporate those sustainability aspects relevant to their business, in particular with regard to the impact of climate change, where they are working on improving their capacity to bear climate risks. For example, they are re-evaluating their investments, implementing CO2 reduction pathways in their investment portfolios and creating incentives for resource-saving customer behaviour. It is not just insurers that benefit from measures to improve energy efficiency and implement a circular economy, but all sectors that implement climate-friendly solutions on their path towards net zero.
Insurance companies support their business partners on their journey towards the net-zero objective. They also give their policyholders feedback based on their business relationship via due diligence processes and in engagement dialogue. On the investment side, many insurers use their voting rights to steer the business decisions of the companies in which they invest in a more sustainable direction. In so doing, they narrow the protection gap caused by advancing climate change and improve loss prevention.
Collaboration and transparency
Sustainability challenges make collaboration more important than ever. The basis for this is transparency on the relevant ESG topics and alignment with international standards. Insurance companies make key contributions as members of multi-stakeholder initiatives, such as net-zero alliances.
Through voluntary commitments, they promote an inclusive and sustainable insurance industry. This also includes collective efforts by the individual insurers in conjunction with players in the real economy, aimed at achieving more transparent standards and improved reporting and data quality. The cooperation not only accelerates implementation of the transformation in the financial services industry, it also helps to bring about progress across the entire economy. Interested stakeholders can track the success of ESG integration via a growing range of sustainability parameters.