Co-ops and mutual insurers have taken the lead on sustainability issues, according to a report from the International Cooperative and Mutual Insurance Federation (Icmif).
The study found that Icmif members have US$1tn in assets under management aligned to sustainable investment frameworks, up 32% on the $759bn collectively invested in 2022.
According to the report, Icmif members have aligned $1,003bn with sustainable investment frameworks, which include green bonds, social bonds and resilience bonds, many of which will be targeting climate change and its effects.
“The latest edition of the Icmif Members Sustainable Investment Report reveals the results of the 2023 Icmif Sustainability Investment Framework Survey, which are a testament to how our members have continued to increase levels of alignment with sustainable frameworks since the inception of our survey in 2019,” said CEO Shaun Tarbuck.
“The insurance industry is uniquely positioned to assist with delivering climate action as it has both the assets to invest and the in-depth knowledge of the many risks that need to be mitigated both on a macro level and a community level to make people and the planet more resilient.”
The report found that 57% of responding members invest in sustainable bonds, including green bonds, social and/or resilience bonds, amounting to $18.3bn, compared to $16.9bn in the 2022 survey. Around 40% of Icmif members have made net-zero commitments, up from 37% last year while 77% of members actively report on sustainability in some way.
The report is based on a survey filled by 26% of the Icmif membership, representing 74.4% of Icmif members’ assets under management for 2023.
The apex also organised a Sustainability Summit in London on 2 November where it launched an Insurance SDG Benchmark.
Derived from the insurance SDG (i-SDG) scores of Icmif members, the benchmark follows the launch of the Icmif-calibrated Insurance SDG Calculator, the first tool to quantify insurance sustainability impact against the insurance Sustainable Development Goals (iSDGs) in 2022.
“The Icmif-calibrated Insurance SDG Calculator enables members to measure and track impact of their business on sustainability-relevant parameters,” said Tarbuck. “The Icmif Insurance Benchmark provides a quantitative way to measure the success of our four-year ‘leading with purpose’ strategy launched at the Icmif Centenary in October 2022.”
“Icmif members can use the iSDG impact metrics and Icmif SDG Benchmark to inform their business strategies using a data-driven approach,” said Alicia Montoya, head of research commercialisation at Swiss Re Institute. “Additionally, insurers can leverage Swiss Re’s SDG Analytics consultancy services to drill into SDG impact metrics at portfolio/product level, identify risks and opportunities, as well as simulate scenarios to help optimise their transition strategies.”
Icmif says the calculator was co-created and tested by and with its members to ensure that it takes into account the way in which mutuals and co-operatives prioritise the needs of their employees and member policyholders.
Since the launch of the framework in 2022, several Icmif members have worked with Swiss Re Institute to use it to derive individual iSDG company scores. In addition to getting individual impact metrics and scores across the framework’s current 49 indicators and the 17 SDGs, participating members were also able to use the benchmark to see how they perform against their peers.
Another benefit is being able to use Icmif’s network to learn about other members’ best practices. Mutual Fire Insurance of British Columbia was among the businesses working with Swiss Re on developing the ICMIF-calibrated Insurance SDG Calculator.
CEO Darin Lord Nessel said: “The overall benefits to our company are immense. The in-depth insights help us understand our current sustainability impact and effectively target measures to improve it across all facets of our company.”
Co-ops and mutuals wishing to find out more about the benchmark can contact Liam Carter, senior vice-president for sustainability at Icmif.
With $10.4tn in assets, mutual and co-operative insurers represent almost 30% of the world’s insurance market.