Our survey of insurers and reinsurers globally, including Bermuda, shows that the vast majority are stepping up their commitments on climate change, tackling inequality and other environmental, social and governance (ESG) issues. But most are still struggling to turn their ambitions into concrete action on ESG. How do Bermuda insurers and reinsurers compare to their global peers? How can you as an insurer or reinsurer plan and evaluate your ESG strategy?
Bermuda insurers and reinsurers’ top ESG priority is minimising the impact of climate change. Enhanced reputation, reduced risk and creating a fairer society also feature prominently. Most identify their approach to ESG as strategic, with the rest largely describing themselves as pragmatic.
Bermuda insurers and reinsurers see the biggest challenges they face in pushing forward on ESG as working out how best to take action, followed by understanding regulation, and changing their operating model to respond to ESG.
(86%) of Bermuda insurers are incorporating ESG into their strategy in ways that go beyond regulatory requirements. But most have yet to take significant action (32% of Bermuda insurers have taken no action on ESG and 54% have met minimum requirements, which puts them some way behind the global survey population as a whole)
Bermuda insurers and reinsurers see customers and regulators as the most important stakeholders when considering their ESG strategy, in line with global peers. Bermuda respondents are more likely to see employee expectations as a priority than others worldwide.
Most Bermuda insurers and reinsurers believe that ESG will have an impact across all functions. Investments are most likely to be affected, though most also cite underwriting and claims.
A significantly higher proportion of Bermuda insurers and reinsurers rate themselves as mature/leading in the area of governance than the global survey population.
"There’s a clear business imperative for re/insurers to be part of the solution to address climate change. Many investors now also look at ESG metrics as closely as financial metrics when making capital allocation decisions. In turn, a focused, strategic approach to ESG will enable Bermuda re/insurers to continue to access capital, comply with ever expanding regulatory requirements, increase shareholder value – and attract and retain talent.”
How can your business overcome the hurdles and move forward on ESG? Drawing on the survey findings and our work with clients, three priorities for action stand out