With assets under management of approximately 10 trillion € insurers in Europe have ample financial strength to drive change that will promote sustainability earning them more trust among customers .
Europe's major insurance company goes 2021 with a greater opportunity to strengthen its commitment to sustainability.
By carefully distributing comprehensive financial access 's and real estate portfolios, they can increase their support for environmental, social and community governance (ESG) initiatives. This sick gives insurers greater trust and support among consumers who are increasing ly seeking large corporations to show their commitment to building a sustainable future. Requirements for companies to be forces for "social good" escalate ing in the wake of the COVID-19 pandemic.
Our Global Consumer Research shows that 66 percent of retail buyers believe that the COVID-19 pandemic has increased the need for companies to help to improve social and environmental conditions. A similar proportion of consumers want companies to "build back better" through long-term, sustainable and fair investments.
With assets under management totaling € 10 trillion insurers in Europe have plenty of economic muscle to drive change that will promote sustainability. Allian z Aviva AXA and Zurich Insurance for example are already using their inv  estment capital allocation as a lever to promote sustainability. They limit investments in organizations such as coal mines which cause significant environmental damage. Some of these airlines are also increasing their funding of environmentally friendly green energy companies. Such funding will increase in the coming years.
"Few strategic decisions are more important than where to allocate capital."
Sustainable insurance companies, as I mentioned earlier in this blog series put sustainability at the core of their business strategies. It governs all important decisions . And few strategic decisions are more important than where to allocate capital. Progressive transport companies that are keen to become sustainable insurance companies are increasingly considering sustainability when making investment decisions.
Sustainable insurance companies will not not only exchange investments from companies that harm the environment to invest in greener alternatives. They will also direct funding from companies with poor social responsibility or board positions to departments companies that are better corporate citizens. O from research with UN Global Compact found that companies that meet generally accepted ESG standards have much greater operation margins than their counterparts which were slow to support sustainability. What more funds that invest in ESG -compatible companies are starting to outperform their traditional peers. As ESG investment continues to rise, and capital costs become more attractive, returns are likely to rise. This will both further increase the attractiveness of ESG investments among fund managers and increase broader indirect effects on investment decisions. Insurers can also increase their commitment to sustainability by managing their real estate assets more efficiently ectively . Buildings account for as much as 40% of the European Union annual energy consumption and 36% of its carbon dioxide emissions ; even more than transport sector . By investing in energy efficient buildings, renovating their extensive office and residential assets reducing energy consumption and using environmentally friendly 19659007] power sources insurance companies can make great progress towards their sustainability goals. Using a dvanced digital technology to collect and analyze large volumes critical from multiple sources they can dramatically improve their energy management. For example, we helped a European retailer reduce its total energy costs by 50 percent.
"Less than one-third of consumers trust insurers to take care of their personal data."
Greater sustainability support will help insurers gain greater trust among their customers. Consumers' confidence in insurance companies has declined in recent years. For example, less than a third of consumers trust insurers to take care of their personal data. This was an important discovery in our 2020 Global Financial Services Consumer Study. Last year, 40 percent of consumers expressed confidence in their insurers' ability to take care of their personal data.
The COVID-19 pandemic in particular seems to have weakened the confidence of consumers in Europe. Only half of the insurance customers that we can pay in Europe for our Consumer Pulse Survey believe that their supplier gave them the support they needed to cope with the consequences of 19659007] pandemic . In North America, the figure was almost 70 percent. However, communication is an area that most insurance companies need to improve. Only one in five insurance customers believe that their supplier communicates clearly and efficiently with them when responding to the pandemic.
Insurance companies that adjust their assets under management to support ESG initiatives will undoubtedly strengthen their sustainability tasks. In order to promote greater trust among their customers, they also need to communicate better with their policyholders . Sharing their sustainability goals and achievements with consumers who are increasingly concerned about the well-being of their society and their natural environment would be a welcome . Sustainability is an issue that affects us all.
For more information on how carriers can turn into s sustainable in insurance companies have a look at the links below. Alternatively, can send me a message. I would like to hear from you . Wish you and your loved ones the very best 2021 .
Five Predictions for the Insurance Industry 2021 – Kenneth Saldanha.
Decade to Deliver: UNGC-Accenture Strategy CEO Study on Sustainability.
The green behind the cloud.
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