2020 has been one of the most challenging years for the insurance industry. According to PWC “For insurers specifically, the fallout from the COVID-19 outbreak includes a surge in health, travel and business interruption claims, pressure on sales from reduced business activity, and less use of face-to-face channels.” KPMG and others see a need for an increased focus on liquidity and predict that returning the industry to business as usual will require restructuring and an accelerated adoption technology driven efficiencies.
One thing the pandemic hasn’t changed is the need for insurers to be more sustainable. Speaking during a webinar by Swiss Re and the UN Environment Programme (UNEP) Finance Initiative’s Principles for Sustainable Insurance (PSI), Butch Bacani, programme leader at the UNEP FI’s PSI spoke about the insurance industry’s role in sustainability and stated “… the insurance industry, as an investor and insurer, can be a real partner and amplifier of that agenda.”
The insurance industry acts as both risk carrier and major investor. This gives the industry the opportunity to drive real change, a concept that has been referred to as ‘impact underwriting.’ This can take a number of forms.
- A different approach to preventive and recovery services especially climate driven events.
- Ensuring suitable cover for those most at risk of climate change – such as homes at risk of extreme weather or wildfires - while working across industry, government and with individuals to minimise exposure.
- Supporting sustainable lifestyles though policies that favour lower premium for eco-friendly product.
- A clear and consistent approach on investing including divestment or stewardship from certain high carbon asset classes.
Insurance organisations need to continue to look carefully at their own carbon footprint to meet the growing expectations of not only Government and regulators, but their customers and supply chain too. IT is very often overlooked as a major contributor to an organisation’s GHG emissions. Thankfully the same strategies that support digital transformation can also play a part in decarbonisation. By moving applications to a public cloud like Microsoft Azure, an organisation can modernise business processes and at the same time exit inefficient data centres and take advantage of carbon zero cloud computing.
Commuting is also another major GHG contributor, accounting for 2.7% of emission globally. The pandemic has shown that remote working is productive but as life normalises a more hybrid workstyle will become the norm. Insurance organisations need to balance their employees’ desire for flexibility with the security and productivity challenges associated with a distributed workforce. Organisations that take advantage of digital workspace solutions from Citrix will be able to take a flexible first approach to employee needs and talent management in a secure and efficient way. Removing the need for unnecessary commuting will have a positive effect on the environment. It will also help democratise access to jobs in the growing digital economy with positive social and business benefits.
The insurance industry has the opportunity to transform how it works and at the same time drive positive outcomes for customers, employees, investors and the planet. Please join us on 1 December 2020 as we look at how technology providers will shape the sustainability agenda in 2021 – both within the immediate fallout of Covid-19 and beyond.