Reinsurers must embed ESG strategies into their core functions

Reinsurers can and should embed ESG-related initiatives in their existing strategy and not regard them as separate projects if they want to get the most out of the opportunities inherent in this space. They should also partner with others and be open to new ideas always.

That was the view offered by Harriet James (pictured), SVP, head of sustainability strategy, RenaissanceRe, speaking at Intelligent Insurer’s Climate Risk & Sustainability Europe 2023 conference, which was held in London on June 7.

She was speaking in a Fireside Chat with  Bermuda Re+ILS editor Bill Zuill called ‘Practical steps towards promoting climate resilience: a reinsurer’s perspective’.

James said she has been given a lot of support from RenRe to develop sustainability initiatives and given opportunities during her 10 years at the company. In 2019, she built out the company’s sustainability function and strategy and said it has been fantastic to see the whole industry moving forward and mobilising in this space.

She noted that there are many variations in the way companies understand sustainability and ESG – and how they relate it to what they do, their corporate culture and commercial interests. She said it should not be a tick box but central to the way in which companies operate and think. “For us, it is strategically aligned with what we are trying to do,” she said.

She said the company started in 2019 by looking at the business’s strengths and existing strategy. It was important to understand what the company was doing at that point. It ended up with three pillars: climate resilience, leveraging its expertise in climate science; closing the protection gap looking to leverage industry partnerships such the IDF, SMI and ClimateWise; and inducing positive societal change, focusing on both its internal and external communities.

She acknowledged some major challenges including on the treaty side where it is very difficult for reinsurers to get detailed oversight of the underlying client base and portfolio. She noted that the company has also collaborated with Moody’s to consider how such challenges could be solved. She said the project will leverage data to consider sector and location as a start and also work with clients to enhance that data.

“We want to provide capacity to companies who have this common goal and we want to move things forward. So, we wanted to tackle this head on. Perfection can be the enemy of progress on this, it is just a first step but we are looking to leverage Moody’ sustainability and data and compare that with our relationships and data to better define the role of the reinsurer,” she said.

She stressed the end goal is also to create opportunities. “To complement the Moody’s data side, we are also working with our employees to make sure they are mobilised and on board to move this forward,” she said. “We want it embedded in our existing strategy.”

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