Dutch Association of Investors for Sustainable Development

VBDO Insurance Benchmark 2019: climate risks still underexposed

Publication:

a.s.r. is the insurer with the best developed responsible investment policy in the Netherlands, according to the “VBDO Benchmark Responsible Investing by Insurers in the Netherlands 2019”. It is the eighth time that the Association of Investors for Sustainable Development (VBDO) is investigating the responsible investment policy of the largest insurers in the Netherlands. This shows that it is still a challenge for insurers to bring responsible investment policy to a detailed level.

Since 2009, VBDO has been comparing the responsible investment policy of the largest 30 insurers in the Netherlands. The insurers are assessed in four categories: management, policy, implementation and transparency. The implementation component looks at the quality and ambition level of sustainable investment practices of the insurer. This research shows that a.s.r. is the best performing Dutch insurer. They’ve come to a score of 4.5, where the maximum score is 5.0. This puts the insurer well ahead of the other front-runners, VIVAT, NN and Achmea.

Although the research shows that the insurers that belong to the leading group are also the largest on the basis of assets under management, it is striking that insurers with a smaller assets under management also perform well. Menzis, in 5th place, performs comparable to some much larger insurers, with which they can serve as an example for medium and small insurers. The insurer with the biggest improvement compared to the previous year is ZLM. They have worked their way up to a place in the middle bracket.

To the Next Level

The VBDO assesses the extent to which insurers take sustainability into account in their investment decisions. Here we look at how companies perform on so-called Environmental (environment), Social (people and society) and Governance (corporate governance) (ESG) criteria. The majority of insurers take these ESG criteria into account at a basic level. To take responsible investment to the next level, a more in-depth and comprehensive approach to ESG integration is needed, whereby ESG criteria are taken into account in existing processes and affect every investment. In addition, insurers should provide insight into specific ESG criteria and (climate) risks per investment category.

Goals

It was already discussed in 2017 that sustainable investing by insurers is still without obligation. This year, too, it appears that it is a challenge to formulate objectives that improve the sustainable investment policy. Although the instruments for responsible investment are being used more and more widely, it lacks a long-term vision. 83% of the insurers lack specific objectives to take responsible investment to the next level. Only a few insurers have formulated time-related objectives.

Climate risks

This year the VBDO emphasizes the integration of climate-related risks in the investment strategy. An important step in identifying climate risks and opportunities is to map the impact of climate-related effects on the investment portfolio. The research shows that only 7% of the insurers have conducted research into the effect of physical and / or transition risks on the allocation of investments. VBDO encourages insurers to include climate adaptation in their investment strategy, to uncover financial risks and to invest in the resilience of societies.

Independer includes benchmark in comparison

Sustainability plays an increasingly important role in the choices that consumers make. Also with financial decisions. That is why VBDO and Independer have joined forces by giving the VBDO benchmark a place in the comparison of health insurance policies at Independer. Coen de Ruiter, director of the digital comparison and advice platform: “Our goal is to give people insight in an understandable way so that they can make financial decisions themselves. Increasingly, customers want to know if their choice is also sustainable. We would naturally like to provide that insight and are happy that we have this scoop in collaboration with the VBDO. From now on, people can filter for sustainability at Independer if they are looking for health insurance”.

Are you curious about our sustainability ratings on the Independer website? Take a look.