ESG in Reinsurance – A chance or an administrative burden?

Solid financial results continue to be the most important driver for long-term sustainability of reinsurance companies, as in any other commercial business. However, societies change and throughout the last years consumers’ behavioral conscience is on the rise. This development consequently led to a broader definition of success that explicitly pulls Environmental, Social and Governmental factors (ESG) further to the center of attention. This public focus drove governments to act, which led to a wide range of policy alterations throughout the last years. Based on its interconnectedness with all other industries, the financial services sector and with that the re-/insurance business is in focus of regulators. This article gives an overview how reinsurers are affected by the trend. In a second step it evaluates whether ESG could be seen just as a regulatory burden or might also offer opportunities.