It’s been a tough few years for all insurance companies, with a turbulent macro political landscape coupled with national economic and environmental hurdles. This has resulted in rising premiums and tightening coverage for higher risk policies – and in some cases coverage removed altogether. In a world where insurers are often mis-trusted, this heightened pressure-cooker environment is making it more challenging than ever for brands to position themselves as a trusted partner, protecting people from disaster.

However, with climate change posing a significant risk to communities and businesses worldwide, insurers will bear a substantial share of the financial burden through claims related to natural disasters. Therefore, there are both business and societal imperatives for them to act. This includes embedding ESG into their own business operations and rewarding sustainable behaviour from policy holders.

By changing underwriting practices, insurance companies can positively impact the environment

The surge in data and increasing AI adoption is an opportunity for insurers to become a catalyst for good. The depth of data now available means quotes can be more personalised than ever before. And by utilising AI to unlock hidden insights faster, personalisation can be offered at scale. This means people will be paying the correct premiums for their situation and can build a policy with exactly the right cover. However, with trust as one of the top motivators between choosing one insurer over another, it’s important to have complete transparency about how data is being collected, used and stored.

Another opportunity for insurance companies is to encourage environmental and societal good by embedding sustainability into their underwriting practices. This could be reducing premiums for insulated homes and EVs, or business insurers offering the construction industry discounts if they apply a green chemistry approach – which reduces pollution and improves overall yield efficiency. Stealing from a different industry, Diageo recently said that when it is looking at product innovation, it always looks for the ‘and’. Meaning that a product innovation only gets developed if it benefits customers, the business AND the environment. Applying this to insurance, ultimately the best claim for all parties is the one that didn’t happen – so by rewarding practices that are better for the environment, encourage safer behaviour or more concrete operations, it’s win/win for everyone.

When it comes to media buying, targeted campaigns across all channels will reduce waste. Not only will this lower the emissions of the campaign but will also save media budgets, resulting in both increased efficiency and effectiveness. It’s also important to understand the sway the industry can have on the advertising industry. With advertising powered by the advertisers, applying pressure on media partners to be more accountable across all elements of ESG, will force the media industry to adopt best-practice ESG principles.

Finally, Garm’s Media Carbon Calculator can measure emissions across all media channels. This allows for the off-setting of emissions through investment in reforestation or renewable energy projects as an example.

The opportunities for insurers to be the catalyst for change across all areas of ESG are huge. Designed to support people and businesses at a time of crisis, they can lend their weight to change consumer behaviour, offer more tailored support to people’s unique circumstances and ensure their own business operations and partners uphold high standards.