Man-made climate change is real and can already be felt today. Therefore, we must act now – more urgently than ever. Taking sustainable action to protect the environment and conserve resources is essential and is becoming the focus of people, companies and politics more and more.
The resulting changes make it necessary for far-reaching adjustments to be made in the insurance industry as well.
We have identified three key drivers arising from climate change that are causing insurers to adapt:
Society’s expectation for everyone involved to act responsibly and considerately is continuing to grow as a whole. For an insurer, the roles of the employee and the policy holders are of particular interest. For employees, it is becoming increasingly important to work for an employer that operates sustainably. Customers are becoming more and more concerned with the company behind a product: what do its social awareness and actions look like, and how does it design its products to be as sustainable as possible?
Legislators have also long since reacted to the need for sustainable action and have enacted numerous new regulations and laws that provide the legal framework for the economy. The regulatory requirements aim at integrating ESG criteria into business processes and thus at the continuous improvement and consideration of sustainability aspects in all economic activities.
Technological progress is noticeable in almost all areas of life these days: it has an impact on society as a whole and has contributed to both economic and socio-cultural change. However, extensive digitalisation efforts are raising more and more questions about sustainability and resource consumption. This is because an increased demand for energy, as well as for natural resources, can have a negative impact on CO₂ emissions. In future, technological development will only be charted in accordance with sustainability goals. At the same time, said development must promote the implementation of solutions that can be used to actively counter climate change.
The drivers described above impact the following four fields of action:
The legislator’s regulatory requirements are intended to promote more sustainable production and economic activity and create as level a playing field as possible. The three main regulations that influence insurers’ actions are Taxonomy Regulation ‘E’ (environment), which was adopted by the European Commission, the Disclosure Regulation and the Corporate Sustainability Reporting Directive (CSRD). This most notably results in reporting obligations, among other things.
More and more customers are taking aspects of sustainability into consideration when making their purchasing decisions – starting with the selection of sustainable insurance products and ending with a holistic, sustainable user experience. Guiding users to the information they want more quickly and with less interaction saves them from viewing and absorbing unnecessary information and thereby creates a positive experience. It also saves resources. Establishing additional digital touchpoints with customers makes it possible to fully digitalise processes and significantly reduce paper consumption.
Aspects of sustainability should also be taken into account in IT and infrastructure. In doing so, the focus should not only be on the data centre, but also on viewing digitalisation holistically. It is important to use existing resources as efficiently as possible – for example, via economies of scale in the cloud – all the way down to an application’s individual feature. Furthermore, sustainability should be established as a performance indicator for IT projects.
Infrastructures from the cloud as well as cloud-native software solutions enable situational and elastic scaling and thus make it possible to save resources. Sustainable software development already helps to reduce the carbon footprint at the source code level. Tools for measuring resource consumption can aid the development process in this respect.
A sustainability strategy is needed in order to bundle and implement the various aspects. It creates a base of operations and justifies all subsequent measures. It also defines what the sustainable goals are and maps out how to achieve them. This not only helps insurance companies with their planning and orientation, but it facilitates internal and external communication as well. An insurer that sets up a sustainability strategy appears honest, transparent and consistent in its plans.
Making a contribution to a sustainable society in a way that is verifiable is a central part of how insurance companies will orient themselves in future.
adesso is your experienced partner when it comes to dealing with the professional, regulatory, technical and methodological issues relating to sustainability. In our innovation workshop on sustainability, we’ll work with you to develop a common view of sustainability in the insurance industry, identify innovative solutions and derive measures for implementing your sustainability goals. We look forward to your enquiry!
adesso is a focus partner in the German Sustainability Network
Zurich developed the Planet Hero App with strategic, professional, methodological and technical support from adesso. The result is a user-friendly, daily sustainability coach on the smartphone.
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