Sustainability focus can benefit reinsurers
The insurance and reinsurance industry should put sustainable development at the heart of their business philosophy, a conference tomorrow is due to hear.
Arthur Wightman, the Bermuda leader and insurance leader at financial services firm PwC, said that the industry faced a number of threats — but also opportunities to influence society and create value by adopting UN sustainable development goals.
Mr Wightman said that companies were having to adapt to disruptive forces like globalisation, tough competition for raw materials and natural resources, as well as a technology revolution that is undermining business models in many sectors, while forcing firms to be more accountable and transparent to stakeholders.
And he added that the 17 United Nations (UN) sustainable development goals should be “a road map for good business growth for the next 15 years”, which is in line with a new PwC report on engagement with sustainable development.
Mr Wightman said: “The case is clear for companies to get involved by doing business responsibly and pursuing opportunities to solve global challenges through innovation, investment and collaboration.
“The insurance industry delivers huge value to society and contributes to the efficient functioning of markets. It’s role could be a catalyst to the success of the sustainable development goals.”
Mr Wightman was speaking before the tenth annual Bermuda Reinsurance Conference, which will feature a “view from the top” panel tomorrow, featuring senior figures like Axis Capital chairman Michael Butt, Hamilton Group chief executive officer Brian Duperreault and Kevin O’Donnell, CEO and president of RenaissanceRe.
The UN goals and 169 targets include achieving diversity and inclusion, ending poverty, sustainable use of natural resources and access to energy.
A PwC survey found that awareness of the goals among companies was high, with 92 per cent saying they already knew of the goals and 71 per cent saying they are already making plans to respond.
Mr Wightman said: “One of the most fundamental inhibitors to the industry’s future success is the lack of diversity in its talent pool.
“As an example, in our most recent global CEO survey, more than three-quarters of CEOs believe that diversity has enhanced innovation, customer satisfaction and overall business performance.”
But he added that another survey of 8,000 women millennials — those born between 1980 and 1995 — had found that they were least interested in working in reinsurance compared to any other industry.
Thirteen per cent did not want to join the industry because of its image,
Mr Wightman said: “This goes much deeper than gender or age to race and ethnicity, education and opportunity.
“In that lies both a challenge, but also a tremendous opportunity for the industry.”
He added that underinsurance represented a gap between the current state and the full potential of the insurance industry in serving the economy.
Mr Wightman said: “This is a role where the value of reinsurance is critical.
“Insurance can have a positive outcome on almost every one of the 17 sustainable development goals.
“The challenge is how the industry collaborates, invests, innovates and perseveres for long term good.
“On the other hand, in creating a positive outcome for society, the outcome for the industry could be transformational from a commercial standpoint.”
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