9 technologies improving ESG in insurance
November 29, 2021 James Tribe
As discussed in our article on ESG and the insurance industry, ESG has emerged as a hot topic in the last year with many insurers placing it only second to COVID in terms of priorities. Numerous insurers have already made commitments to more ethical and sustainable practices and we predict that further regulation emphasising the importance of ESG will continue to be introduced throughout the next decade. The pressure to show some form of commitment is mounting.
With this in mind, the following collection draws from our insurance technology database, Magellan, to consider how technology can improve ESG across the insurance industry. From satellite imagery for carbon monitoring to employee wellness, microinsurance and sustainability, our latest Magellan Collection showcases the diverse ways in which technology can make insurance practices more sustainable, equitable and inclusive.
Environment relates to the way a company positively impacts its impact on the natural or physical environment. For an insurance company, this could mean a commitment to net-zero carbon emissions, or supporting the renewable energy transition through its underwriting policy.
Environmental initiatives are invariably powered by technology. Most often, we see geospatial data used for monitoring and tracking carbon emissions across a supply chain. At the same time, products like Energetic Insurance’s credit insurance for renewable energy highlight the opportunities for (re)insurers to benefit from supporting green innovation.
Satellite Vu is a data analytics company that provides insights into economic activity, energy efficiency and carbon footprint. Its building temperature monitoring can be used to track and reduce carbon emissions over time.
CarbonChain provides solutions to track the risks involved in carbon supply chain systems and reduce greenhouse gas emissions across industries such as oil & gas, mining and agriculture.
Tesselo uses satellite imagery and artificial intelligence technologies to help businesses to assess sustainable environmental challenges.
Energetic Insurance has developed an innovative credit insurance product for the renewable energy sector that helps increase access to capital for commercial renewable energy projects.
Much of the attention on ESG has centred around ‘green’ initiatives such as tracking and reducing carbon emissions as highlighted above. However, we have also selected a number of companies assisting in ‘Social’ and ‘Governance’.
Social relates to a company’s commitment to fairness in society. This could include the way it interacts with its workforce or addresses the known D&I challenges in the industry, how it vets its distribution partners and supply chain to avoid mis-selling or poor claims practices, or how it behaves in the community, for example by avoiding financial exclusion through discriminatory pricing practices.
Mental and physical wellness platforms, such as Wysa and Sweatcoin below, can be invaluable partners in a health ‘ecosystem’ that ultimately enriches customers’ lives, and thus have been considered as socially beneficial.
Companies like Democrance and Saphron provide examples of product launches targeted at developing markets, where large populations are often uninsured. By providing protection to previously uninsurable customers, they can provide a social safety net for families and communities.
Sweatcoin’s digital health platform and mobile app converts a user’s outdoor steps into a virtual currency (“sweatcoins”), which can be spent within the app’s marketplace on real goods and services.Wysa is an AI-enabled application that includes a chatbot, self-help tools, and messaging-based support from human therapists for mental and emotional wellness.Democrance has developed a full-lifecycle SaaS core platform that allows clients to build and launch insurance and microinsurance products specifically aimed at uninsured and underinsured markets.Saphron has developed a platform using AI and real-time data analytics that makes insurance accessible and focuses on financial inclusion in Southeast Asia.
Governance relates to the way a company runs its operations. This includes the way a company makes decisions, reports, and generally ensures ethical behaviour.
Companies like Grun Versichert are examples of how partnerships can increase (re)insurers’ transparency around green, sustainable corporate governance.Grün Versichert provides an insurance comparison platform to check whether insurance premiums are invested into sustainable projects.
The Oxbow Partners View
ESG affects all aspects of an insurance company’s operations. At the highest level, insurers are able to promote ESG in the wider market by recognising its benefits in their underwriting and investment practices, and they must lead by adhering to high ESG standards themselves.
With the number of organisations now vocally striking a position on ESG, the pressure to show some form of public action is mounting. However, ESG should not be seen as just an inconvenient corporate necessity but an area of opportunity for the insurance industry, as well as a potential risk for those who are too cautious in their approach. To find out more, read our article about ESG and the insurance industry and the risks and opportunities for insurers from the ESG wave.
To learn more about the companies featured in this collection, visit Magellan via the button below.
Browse the ESG Collection on Magellan
Disclaimer: the above list is impartial and was selected by the Magellan™ team based on interesting, relevant propositions. It is not exhaustive, nor should it be considered an endorsement of the listed solutions by Oxbow Partners.