Wild demands clarity on ESG underwriting policies

The head of France’s risk management association has urged insurers to be more coherent with their underwriting policies because they are not yet rewarding the risk management and ESG efforts made by clients.

Oliver Wild, president of AMRAE, also demanded that insurers engage in more dialogue with buyers and provide covers for sectors, such as renewable energies, that currently struggle to find protection.

“Insurance policies are between the anvil and the hammer,” Wild said at the opening of the 31st Rencontres de l’AMRAE, the association’s annual conference in Deauville. “But there is little overall coherence among underwriting policies (implemented by) market players.”

“Between a reduction of exposures and the resumption of appetite in certain insurance lines, this hot and cold (approach) does not reflect our prevention policies,” he added.

Wild said that underwriting caution is understandable currently, but a broader view is required from the insurance market to meet the needs of French companies.

“Premium rates and covers must only be the outcome of a dialogue between insureds, brokers and insurers,” he said. “Sometimes it is disconcerting. As a quick example, take ESG, which has become an obsession, but the renewable energy sector struggles to obtain insurance.”

“The goal of (achieving) resiliency must be shared,” Wild pointed out. “Otherwise, it will lack its perspective.”

The AMRAE president also warned that new risks have emerged that can be hard to transfer to the insurance market, such as climate change and cyberattacks. But buyers shouldn’t have to worry about risks that, on the face of it, seem insurable.

“Will we stand pat in the face of the economic and social consequences of the risk of non-insurability?” he asked, adding that the proliferation of captive companies, which has accelerated in France in recent times, is an initial answer to that question.

The theme of AMRAE’s annual conference this year is ‘For the Love of Risk’. This aims to reflect the passion that risk managers have for their jobs and the attitude they need to tackle new challenges that do not stop coming their way.

Wild said that he supports risk managers that are becoming more involved in areas such as the implementation of artificial intelligence by their companies.

“Our role is not to become AI experts, but to provide a rigorous methodology to evaluate the risks and opportunities that it presents,” Wild said.

He also stressed that the relationship between risk managers and corporate ESG strategies must become stronger.

The need to comply with the EU’s Corporate Sustainability Reporting Directive (CSRD) is set to accelerate this process, he added.

“It will imply not only deep knowledge of our own companies, but also an understanding of the external dynamics that influence our supply chains,” Wild remarked.

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The inaugural ESG Insight and Intelligence Conference will take place in London on 26 June. This event will examine the European regulatory demands associated with ESG, look at the impact on the corporate risk profile and consider how these risks can be managed more effectively. It will also drill down on the increasing demands and disclosures requirements placed upon insurance buyers by insurance carriers. For more information, please visit https://events.commercialriskonline.com/ESG-24