In today’s corporate landscape, Environmental, Social, and Governance (ESG) considerations have evolved beyond regulatory compliance to become essential strategic pillars for businesses. Amid growing public interest about how businesses impact the planet and society, the relevance of ESG principles has heightened across industries. Mutual carriers now have a unique opportunity to leverage ESG initiatives to gain a competitive advantage. Amy Cooper, VP — Carrier Practice Sales, reveals how a greater investment in ESG can help mutual carriers attract customers, enhance brand reputation, and ultimately drive a competitive advantage.
ESG initiatives on the rise
The growing focus on ESG in the insurance sector is a key insight from our global survey of 150 carriers and resulting whitepaper, The Carrier Perspective: 2024 Claims Insights. On a global scale, 75% of all carriers said they were increasing their ESG efforts via initiatives such as increased communication and awareness, a rise in ESG-aligned policies and guidelines, significant investments in technology, and rigorous measurement and reporting of ESG performance.
We are no different at Gallagher Bassett (GB), with our dedication to ESG implementation earning us Equality 100 recognition from The Human Rights Campaign Corporate Equality Index 2023. This was the fifth consecutive year that we maintained the highest score in the Index, and we can attest to the benefits that flow when ESG is treated as a key strategic marker.
The benefits for mutual carriers
While all carriers can benefit from ESG-driven initiatives, mutual carriers have potential to reap the rewards of such investment. As values-driven organizations, mutual carriers attract many customers impelled by higher ideals and a greater sense of community. This is the experience of one respondent of the global survey who said, “With increasing awareness and concerns about social and environmental issues, customers are increasingly inclined to support businesses that demonstrate responsible practices. By integrating ESG factors into their operations, organizations can attract customers who prioritize sustainability and ethical considerations.”
Mutual carriers that demonstrate commitment to sustainability, ethical governance, and diversity and inclusion can attract customers who prioritize these values, while ESG considerations can also drive product innovation. For example, our global survey revealed that 69% of carriers have experienced increasing demand from policyholders for climate-specific products. The growing interest in ESG-linked insurance products means mutual carriers that tap into these trends will resonate with ESG-conscious customers.
ESG as a competitive advantage
There is still an opportunity to be an early adopter and join the 21% of carriers who say ESG integration provides them with a competitive edge. Between bolstering product portfolios and reducing exposure to risk, mutual carriers that embrace ESG initiatives can remain one step ahead of their competitors, as evidenced by commentary shared by survey respondents when asked how their ESG integrations had supported their competitive edge:
- “Investors find it a point of differentiation and want to back responsible businesses.”
- “Customers want to buy from a company that cares.”
- “We are a leader in the renewable energy sector and have developed new (ESG) products that have attracted new customers.”
- “It has enabled us to have an advantage in our recruitment.”
- “Shifting corporate strategy to adapt to these needs is working toward further profitability.”
GB’s dedicated Carrier Practice is committed to helping mutual carriers navigate the complexities of ESG integration. We take a proactive approach, prioritizing the ESG goals and objectives that will allow both them and their policyholders to thrive in the rapidly evolving world of insurance. Download The Carrier Perspective: 2024 Claims Insights to discover more global industry trends, or contact us to learn how we can support you.
