Unrivaled green initiatives may raise eyebrows.
In a recent study, sustainability has been identified as an independent factor alongside career and education, leisure and family, and provision and health. However, the idea of sustainability alone is not enough to influence people's behaviour, according to the results of the study.
The study, created by the analysts of the consulting firms Sirius Campus from Cologne and Aeiforia from Montabaur, reveals that insurance companies in Germany are addressing sustainability mainly through initiatives that emphasize circular economy principles, climate risk management, and integrated sustainability strategies in underwriting and investments.
For instance, Allianz is actively promoting repair over replacement in vehicle insurance, reducing waste, emissions, and costs by using high-quality used parts and collaborating with auto recyclers and regulators to scale this approach. They also implement sustainability in their repairs programs internationally, adapting to local regulations to foster sustainable consumer behaviour.
Furthermore, German insurers are developing strategies to align investment portfolios with global sustainability goals and manage environmental, social, and governance (ESG) risks, incorporating climate risk assessments to protect liabilities and improve resilience.
In comparison to other sectors in Germany, the insurance sector tends to act both internally (operational changes) and externally (in investment management). While the energy and banking sectors emphasise sustainability through finance and risk assessment innovations, the food sector advocates for regulatory stability and standardized reporting, and the holiday travel sector focuses on practical carbon reduction measures via travel policies.
The study also found that 51% of decision-makers and influencers aged 18 to 69 in Germany consider sustainability important when taking out insurance. However, only 13% of respondents are willing to accept higher costs for sustainable insurance offerings.
Moreover, 72% of participants expect companies they deal with to take concrete measures to protect people, climate, and nature. More than half of respondents find insurers' internal sustainability measures credible and effective. Measures such as supporting social and ecological projects, planting a tree after a contract is signed, or avoiding investment in controversial industries are less well-regarded and lack credibility.
The preference for regional solutions in claims management is similar, with 72% of participants expecting companies to prioritise local solutions.
The results are from the 90-page focus report "Sustainability" from the 2021 Customer Monitor Insurance, which surveyed 2,000 consumers. Christoph Müller, CEO and founder of Sirius Campus, states that insurers must translate growing calls for sustainability into concrete, targeted actions.
In conclusion, while sustainability is important to a significant number of Germans, it is not yet a driving factor in insurance decisions. Insurers face a challenging task in balancing the growing calls for more sustainability and avoiding it being perceived as mere marketing by customers. The benefit of sustainable insurance products has not yet been clearly demonstrated, and action is needed in this area to provide relevant insights into this balance.
- Environmental science, such as climate-change, plays a significant role in the sustainability initiatives undertaken by insurance companies, with many focusing on circular economy principles and integrated sustainability strategies.
- In the study, it was revealed that a majority of Germans, aged 18 to 69, consider sustainability important when selecting insurance products, but only a small number are willing to pay more for sustainable offerings.
- The insurance sector, in Germany, is not only focusing on internal operational changes but also on external actions, such as aligning investment portfolios with global sustainability goals and managing environmental, social, and governance risks.
- The preference for sustainable living extends to insurance, with over seven in ten participants expecting companies to take concrete measures to protect people, climate, and nature, and prioritize local solutions in claims management.
