The Association of German Public Insurers (VöV hereafter, Verband öffentlicher Versicherer) welcomes the consultation of the Principles for Sustainable Insurance Initiative on Underwriting environmental, social and governance risks in non-life insurance business. As Germany’s second largest primary insurance provider with a strong regional presence, the group is committed to constructive dialogue in the interests of all market participants and of a stable European and global insurance sector.
The VöV generally supports the approach to develop voluntary and market driven approaches to strengthen ESG criteria in the business models of insurers. Best practices and flexible guidelines for a holistic treatment of ESG risks are therefore very welcome, whereas mandatory and inflexible rules would be harmful for insured parties, insurers and the economy.
The VöV rejects any approach that excludes entire industries from insurance coverage or increases premiums due to non-risked based ESG considerations. Such an unjustified and unproportional intervention into the business models of insurers would have detrimental consequences for insured companies, their employees, value chains, regional economies and tax earnings. Any ESG assessment must take consequences for companies, jobs and growth into account.
In particular, the VöV supports an open approach that allows for sufficient flexibility in strengthening ESG considerations in the underwriting process on a voluntary basis. This openness is essential to help insurers of all sizes to succeed in this endeavour. Rigid rules would be a significant burden for smaller companies and proportionality will be a key factor for the progress of the initiative.