The report provides Vigeo Eiris’ exclusive opinion on sector vulnerabilities, controversies and emerging risks, as well as strengths, innovations and best practice in terms of CSR. The report highlights sector ESG challenges and emerging issues, as well as performance scores and advanced indicators on critical issues such as energy transition, business ethics, due diligence on social and environmental risks in the supply chain, human capital and human rights, governance, executive remuneration, transparency on taxes, integrity of lobbying practices, the level of sustainable products & services, and contribution to the UN Sustainable Development Goals.
1. Vigeo Eiris awarded an average overall score of 29.7 to 159 companies in the Insurance sector, on a scale of 0 to 100. The sector’s performance remains unchanged since our previous analysis (2016).
2. The sector ranks 23rd out of the 39 business sectors comprising Vigeo Eiris’ total research universe of 4,500 companies.
3. Sector leaders are concentrated in Europe, whilst laggards are mostly listed in Emerging Markets.
4. The Insurance sector disclosure rate is 55%, slightly above the universe average (54%), with European companies being most transparent.
5. Reputational risk management and operational effectiveness scores are limited (32/100 and 30/100), and risk management scores for cohesion and human capital skills development are low (26/100). Legal security risk management has a limited average score (37/100), that is higher than the sector average (32/100). Legal proceedings in the sector mainly concern disputes related to business ethics.
6. The Insurance sector’s capacity to tackle climate change and support the transition to a low-carbon economy remains weak (22/100). European insurers lead the sector in integrating climate risk management into their underwriting. Regarding investment activities, 23% of companies commit to divesting from coal and fossil fuel and only 3% have set quantified targets in this regard.
7. The sector faces 152 controversies, none of which are critical. The most frequent controversies concern fundamental human rights, customer relations and business ethics.
– Insurers are required to monitor evolving risks and develop new products capable of protecting clients. Despite the Insurance industry’s progress in researching emerging risks (such as ageing population, technological innovation, obesity etc), the product offer remains limited.
– The Insurance sector is exposed to digital security risks such as data fraud and disruption – as demonstrated by the Anthem case of 2015. At the same time, the industry may promote digital resilience by integrating digital risks into client policies and services.
– The digitalisation of the industry and the 2008 financial crisis have had, and will continue to have, serious impacts on the workforce, necessitating more investment into human capital: the industry’s ability to protect and enhance its human capital assets is weak (26/100).
– Revised governance guidelines encourage insurance companies to integrate ESG issues into their frameworks. A risk-oriented approach to sustainability has generally improved, whilst Board oversight and management accountability on sustainability are progressing more slowly.
Best performing areas:
o Board of Directors
o Internal controls & risk management
Worst performing areas:
o Green products and proprietary assets
o Business travel and commuting
Top Performing Companies:
o Europe: Axa (70/100)
o North America: Hartford Financial Services Inc (38/100)
o Asia Pacific: Tokio Marine Holdings (39/100)
o Emerging Markets: Samsung Fire & Marine Insurance (40/100)
Companies making best progress since 2017:
o Europe: Mapfre (+13)
o North America: New York Insurance Co. (+2)
o Asia Pacific: Dai-ichi Holdings (+8)
o Emerging Markets: People’s Insurance Company (+8)
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