Asian insurers must participate more on sustainable practices

The role of insurance in promoting global sustainability is crucial—but Asia is lagging behind other regions, a panel at this week’s East Asian Insurance Congress (EAIC) heard.

“Asian insurers should be collaborating on resilience, health risk prevention, decarbonisation and natural habitat loss,” said Butch Bacani, programme leader, UN Principles for Sustainable Insurance (PSI). “But Asia’s participation is totally disappointing.”

Bacani cited the Africa Climate Risk Insurance Facility for Adaptation, for which insurers are underwriting $14 billion of climate-related cover for 1.4 billion Africans, and the Bogota Declaration on Sustainable Insurance, in which 40 insurers are sharing practices on social inequality risks. “Where is Asia?” he mused. 

He acknowledged that most leading South Korean insurers are members of PSI, while some companies in Japan, mainland China, Hong Kong and Singapore had also signed on. “The tiger is waking up,” he said. 

Sustainability was described as a measure of global happiness. “I do think insurance is protector of everyone’s wellbeing,” said Orchis Li, general manager of Gen Re in Hong Kong. “Insurance is not tangible but it provides peace of mind, and that makes you happier.”

Masayuki Tanaka, general secretary, EAIC and managing director of the Foundation for the Advancement of Life and Insurance Around the World, said Japan was leading the way. “Improving sustainability is crucial, especially for the insurance industry,” he said, noting that a UNESCO programme supported by Japanese companies was teaching students how to tackle global warming and biodiversity loss.

“From kindergarten, Japanese students are learning about sustainability, and managers of insurance companies are learning about sustainability from the children.” He added that complex scientific information on sustainability is being translated for businesses to understand. “The insurance industry has to contribute to getting sustainability information to the public,” Tanaka said.

A difficult path

Li warned that there were many obstacles to sustainable insurance practices. “As far as sustainable affordable healthcare is concerned, we’re at a juncture. We need collaboration with all the stakeholders,” she said. “Medical inflation is sky high—with double-digit rises year after year,” she added. “People are living longer, and you need that valuable protection.”

Healthcare is especially complex, she added, because it involves a lot of stakeholders in the ecosystem. She urged regulators—as well as healthtech companies, patient groups and policyholders—to step up to promote sustainability. “We cannot do this alone,” she said.

Clement Lau, executive director for policy and supervision at Hong Kong’s Insurance Authority (IA), said he was mindful that different regulators had their own requirements.

“Health is an acute point in the sustainability agenda.”

But there were signs of harmonisation of regulatory requirements on sustainability reporting, he said. He cited the work of insurance standard-setters and the World Bank’s Community Development Carbon Fund regulations.

“Regulators such as the IA participate in a number of international forums but one of the emerging problems in the wider sense of medical insurance across Asian countries is  affordability. 

“People are getting older and there is slower population growth, but less-developed countries are seeing problems of accessibility,” said Lau.

Bacani agreed, noting that “health is an acute point in the sustainability agenda” and that “health risk prevention and the protection gap are mutually reinforcing and should be championed by life insurers”.

For more news from the East Asian Insurance Congress conference (EAIC) click here.

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