Artemis Live - Insurance-linked securities (ILS), catastrophe bonds (cat bonds), reinsurance 30: ESG in the risk transfer, reinsurance & ILS market
Dec 24, 2020
38:48
Our latest podcast episode features an interview with Patrick Roder, Associate Partner and Global Head of ILS at Synpulse Management Consulting, who joined us recently to discuss the publication of a study analysing the results of our survey on the maturity of environmental, social, and governance (ESG) practices in the risk transfer, reinsurance and insurance-linked securities (ILS) markets.
Market participants across risk transfer, including insurance-linked securities (ILS) and reinsurance, have a lot to gain from further operationalising Environmental, Social and Governance (ESG) within their core businesses, the now published study reveals.
During the third-quarter of 2020, Artemis teamed up with boutique consulting firm Synpulse to conduct this survey on the maturity of ESG practices within the risk transfer, reinsurance and ILS markets.
During this interview, Roder explained why Environmental, Social and Governance (ESG) factors have become such a hot topic in risk transfer and why this is relevant to the insurance-linked securities (ILS) market as well.
"The concepts that stand behind ESG are not new at all. In fact sustainability is at the very heart of the risk transfer market.
"Some players might have had a more narrow definition of what that means, but others have pretty early on already had a broad definition and actually also been driving the definition of sustainability themselves," Roder said.
"So it's not like this subject has become suddenly a hot topic for the reinsurance and ILS market, but it has built up overtime," Roder continued.
"It's true that in ILS and reinsurance it has been a bit more recent compared to other parts of the financial industry, but that's probably just because the asset class of ILS and the underwriting side of the insurance and reinsurance industry is a bit more complex, when you look at the value chain, all the parts you have to look at. It's much more complex than analysing an equity investment.
"So I think the market needed some time, to build up this pressure and also the know how to put more focus on the topic of ESG."
The interview went on to discuss the inherent ESG qualities of reinsurance and ILS, but also why true ESG compatibility requires much more transparency and disclosure in the market chain.
Market participants across risk transfer, including insurance-linked securities (ILS) and reinsurance, have a lot to gain from further operationalising Environmental, Social and Governance (ESG) within their core businesses, the now published study reveals.
During the third-quarter of 2020, Artemis teamed up with boutique consulting firm Synpulse to conduct this survey on the maturity of ESG practices within the risk transfer, reinsurance and ILS markets.
During this interview, Roder explained why Environmental, Social and Governance (ESG) factors have become such a hot topic in risk transfer and why this is relevant to the insurance-linked securities (ILS) market as well.
"The concepts that stand behind ESG are not new at all. In fact sustainability is at the very heart of the risk transfer market.
"Some players might have had a more narrow definition of what that means, but others have pretty early on already had a broad definition and actually also been driving the definition of sustainability themselves," Roder said.
"So it's not like this subject has become suddenly a hot topic for the reinsurance and ILS market, but it has built up overtime," Roder continued.
"It's true that in ILS and reinsurance it has been a bit more recent compared to other parts of the financial industry, but that's probably just because the asset class of ILS and the underwriting side of the insurance and reinsurance industry is a bit more complex, when you look at the value chain, all the parts you have to look at. It's much more complex than analysing an equity investment.
"So I think the market needed some time, to build up this pressure and also the know how to put more focus on the topic of ESG."
The interview went on to discuss the inherent ESG qualities of reinsurance and ILS, but also why true ESG compatibility requires much more transparency and disclosure in the market chain.