Lloyd’s hosts expert panel on the reinsurance sectorCommunity News 18 Mar 2021 05:34 pm
91% of insurance industry leaders in the Middle East believe that ESG presents an opportunity for their business
Tuesday 16 March, Dubai: Lloyd’s, the world’s leading insurance and (re)insurance marketplace, in partnership with the Dubai Financial Services Authority (DFSA) and Dubai International Financial Centre (DIFC), hosted an expert panel to discuss the role of the (re)insurance industry in supporting the Middle East transition away from a carbon-based economy towards a sustainable future, whilst balancing commercial pressures.
Moderated by Robert Willock, Director of The Economist Corporate Network MENA, the panel included a mix of public and private sector leaders who spoke to 59 regional insurance industry specialists about the challenges and opportunities for responsible investment and underwriting across the region.
Viewers were asked to vote during the panel on whether the ESG agenda was viewed as a threat or opportunity to them and their business. The majority of participants believed that it presented a major (63%) or minor (29%) opportunity, while only 9% believe that it presented a minor risk. 53% said that ESG was rising up fast on their list of priorities.
Bruce Carnegie-Brown, Chairman of Lloyd’s and its ESG Advisory Group, said: “Insurance enables greater risk, and businesses will need to take risks to meet the climate agenda opportunity. The (re)insurance industry has a ringside seat to climate change, with natural catastrophe forming an increasing large component of the risk we underwrite. This is a global problem that needs global solutions and governments across the world continue to highlight the need for action. Meanwhile businesses understand that they have a role to play beyond increasing profits in creating more value for society, and that taking ESG seriously will also bring real commercial advantage over the long-term.”
For the first time, Lloyd’s has set publicly accountable targets for responsible underwriting and investment following feedback from and in consultation with market practitioners. Lloyd’s has also set timescales for the market to phase out insurance cover for thermal coal-fired power plants, thermal coal mines, oil sands and new Arctic energy exploration activities.
Mr. Carnegie-Brown added, “Our focus is on our own footprint and investment portfolio as well as our role in the global underwriting space, particularly areas that have the biggest impact on climate change. We want to provide a glidepath away from fossil fuels towards renewables and support the customer transition towards most sustainable business practices. Our clients in fossil fuels are also major investors in renewables and constructive participants in the transition. We will work closely with our market and customers to help them plan for these changes.”
Bryan Stirewalt, Chief Executive, Dubai Financial Services Authority, commented, “ESG is not easily solved through rules and regulations alone; public-private discussion and collaboration is critical to progress. The DIFC is home to some of the world’s largest banks and insurers which continue to exercise more caution and scrutiny around carbon-intensive projects. Our priority is to create a taxonomy with clear metrics to enable innovative and adaptable solutions to ESG challenges. More than ever, the global pandemic demonstrated that non-traditional risk requires non-traditional solutions and it’s important for regulators to create a facilitative environment for change.”
Lloyd’s first ESG Report and strategy, launched in December 2020, provides a comprehensive market-wide strategy to support the global transition to net zero and drive culture change across the Lloyd’s market. In addition to initiatives in support of the global transition to net zero, Lloyd’s ESG Report highlights ongoing work to drive culture change across the Lloyd’s market. This includes commitments to meaningful and measurable actions to build a more inclusive working environment such as establishing Lloyd’s Culture Advisory Group and the setting of gender targets during 2020, and ethnicity targets to be announced in 2021.
From its operations in the DIFC, Lloyd’s brings 333 years of experience to the MENA insurance and (re)insurance market, catering to a steady growth in demand for more sophisticated (re)insurance products.