Sustainability: Italian insurers still believe in it

With regard to the role of insurance companies as institutional investors, the research shows that 99.7 per cent of the sample incorporate ESG criteria into their investment policies and, in 94 per cent of cases, apply them to between 75 per cent and 100 per cent of their portfolio. ESG criteria are incorporated through a variety of approaches: exclusions (100 per cent), international conventions (91 per cent), engagement (89 per cent), thematic investing (81 per cent), best-in-class (79 per cent), impact investing (67 per cent) and voting (64 per cent).

The current geopolitical climate has not led to a decline in the focus on ESG issues amongst Italian insurance companies, 72 per cent of which have not altered their policies, whilst 28 per cent have actually increased their focus on sustainability. 98 per cent of the sample measures the carbon footprint of its investment portfolio, which, since the survey began, has decreased in 80 per cent of cases and remained unchanged in 17 per cent. Furthermore, 69 per cent of the sample includes the objective of climate neutrality in its investment policies. A further 19 per cent plan to do so.

With regard to insurance companies’ risk-mitigation activities, 88 per cent of the sample incorporates ESG criteria into their underwriting policies: this is the figure that has risen the most over the last five years (in 2022, it stood at 45 per cent). Furthermore, 11% are currently assessing this issue.

ESG criteria are integrated in various ways, ranging from the provision of insurance products dedicated to ESG themes (94 per cent) or offering premium incentives (85 per cent), to restrictions on the provision of cover for activities exposed to high ESG risks (89 per cent). 97 per cent of the sample offers non-investment insurance products (non-life and life) with environmental and social features. Furthermore, 64 per cent of the sample adopts sustainable solutions in claims management and in the provision of ancillary cover. A further 14 per cent plan to do so.

“The major and far-reaching transformations currently taking place in our country are creating new protection needs, and the insurance sector is called upon to play a central role, particularly in terms of sustainability,” said Giovanni Liverani, president of Ania: ‘It can strengthen the resilience of households and businesses in the face of climate-related risks, by placing an appropriate focus on prevention; it can promote social cohesion in the country, complementing the role of the State, through the development of supplementary pension schemes, supplementary health cover and insurance solutions for long-term care.’

Francesco Bicciato, Director-General of the Forum for Sustainable Finance, is on the same wavelength, noting that the insurance sector has always been one of the most important drivers of sustainable finance. “Today, in the face of growing social inequalities and a well-documented climate emergency, protection against ESG risks has become a prerequisite for sustainable development,” explains Bicciato. “This year’s research data show that the path towards three-pronged sustainability – financial, social and environmental – has now been mapped out. The evolution of responsible investors – including insurance operators – demonstrates that the competitiveness of our economic system cannot be achieved without a radical reduction in vulnerabilities and the pursuit of full environmental justice.”