In today’s increasingly regulated insurance landscape, environmental, social, and governance (ESG) is at the forefront, both in how insurers invest and how you run your organization. ESG expectations come to insurers from a multitude of stakeholders, including customers, employees, board members, and more.
Meeting the demands of all these groups isn’t easy—regulations vary by region and insurers often house ESG data in multiple disparate systems, making gathering data and adopting and reporting on ESG practices difficult. In fact, roughly 60% of US insurers and reinsurers seek clarity from regulators with respect to identifying, measuring, and reporting ESG factors.
But don’t let that deter you from adopting ESG-friendly practices and incorporating ESG investing into your organization’s strategy. The stakes are far too high—76% of consumers say they will stop buying from companies that treat the environment, their employees, or the community in which they operate poorly.
So how can insurers expect to move past the challenges ESG management brings and deliver for stakeholders? To streamline ESG efforts, meet stakeholder expectations, and comply with ever-changing regulations, you need to build agility into your organization, processes, and technology.
Many insurers no longer see ESG-friendly practices as optional and have been adopting new policies and developing new offerings accordingly. But, this doesn’t mean insurers’ technology was—or is—set up to properly manage these efforts. ESG management is heavily reliant on data from various sources, including internal data, third-party data, and regulatory data, and the more data sources involved, the more difficult it’s likely to be to track that data. Disparate systems limit access to essential ESG information and can hinder ESG efforts. Too many systems also makes it difficult to replicate processes for recurring tasks, such as monthly or quarterly ESG report-outs.
On top of inaccessible, siloed data, insurers also must adapt their processes to regulations that are in a constant state of evolution. There is no single global ESG standard for companies to aspire to, resulting in a patchwork approach. The EU is further ahead than many regions and offers an ESG Taxonomy that provides regulatory guidance, screening criteria, and associated questions that help evaluate ESG adherence. In the US, there are currently no ESG-specific disclosure requirements, although the SEC requires all public companies to disclose information that may be material to investors, which includes information on ESG-related risks. In Canada, while there are no specific ESG disclosure mandates, momentum toward requiring corporate disclosures appears to be increasing.
These are the key challenges putting increasing pressure on insurers to maintain a high level of agility. To be able to adapt to changing requirements, streamline a multitude of data sources, and make those sources accessible in your operational processes, you’ll need technology that can evolve with your business. Your staff to be able to access pertinent data and make changes to workflows as regulations change, ESG efforts ramp up, or optimization is needed.
Low-code platforms will let you be agile with your ESG efforts. Making all relevant data accessible in a single platform is essential for efficient ESG tracking and reporting. Built for your unique ESG needs, low-code applications can automate tasks and workflows where needed with robotic process automation, artificial intelligence, intelligent document processing, and customized business rules to give time back to employees so they can deliver even more value to the organization.
With GRC—and more specifically, ESG—expectations rising, technology that adapts with you and your stakeholders as the world changes will have a profound impact on how successful you can be. Agility within your insurance organization is essential to developing effective ESG practices that meet stakeholder expectations.
If your technology is hindering your ability to adapt, consider low-code. Learn more about low-code and its impact on insurers’ ESG efforts in our latest whitepaper, Facilitate Faster Time to Close with Accelerated FNOL Operations.