The ‘S’ in ESG: Protecdiv launches industry tool to model social risks

Protecdiv, a US-based property and casualty re/insurance brokerage, has launched a tool designed to measure and report the “Social” component of ESG (environmental, social, and governance) on the liability side of a balance sheet.

SERV-S, the Social Equity Risk Vector Score, provides a score for commercial property, residential property, and mortgage re/insurers to quantify the social element of their ESG goals. The tool combines re/insurers’ portfolio data with national economic and risk data to calculate the social benefit generated by their insurance portfolios.

“For ESG initiatives, the insurance and reinsurance market needs better measurement and reporting to properly addressing the ‘S’,” said Kael Coleman, founder and chief executive officer at Protecdiv. “We have created a tool that allows the market to leverage our expertise as a reinsurance broker with a specific focus on improving society through insurance. We have the know-how to champion and grow your social equity impact.”

SERV-S, which covers both commercial and personal lines portfolios, calculates a social equity score by analyzing a re/insurer’s property or mortgage portfolios and determines how much social equity value that portfolio is providing. The tool calculates how well re/insurers are supporting underserved communities, for example, areas that have lower incomes, have high minority populations, or are prone to natural catastrophe risk.

Cate DelaCruz, senior director of analytics at Protecdiv, added: “Underwriters and re/insurance executives very much stick to the mantra of ‘what gets measured gets done’. They want to be more socially conscious but also have combined ratios and market margin targets to hit. This tool gives our clients something tangible to work with. We provide a score between one and five, which gives companies directional advice for laying a footprint in socially vulnerable or disadvantaged areas. This may encourage them to write business in those areas and downstream.”

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