NEWS
P/C insurers lag on ESG asset management
P/C re/insurers are behind the curve implementing ESG into their asset management, says Fidelity.
Property and casualty re/insurers are falling behind the curve in implementing environmental, social, and corporate governance (ESG) into their asset management strategies—and current volatilities in the investment environment could delay even the best-prepared investment teams further.
That is the view of Ghislain Perisse, head of insurance solutions for Europe at Fidelity Investments. He says the industry needs a wake-up call as too many players are behind in their journey to better assess and progress towards ESG targets.
“P&C re/insurers are very late on the topic because they consider investment something with no link to underwriting,” Perisse told Monte Carlo Today following his presentation to Rendez-Vous participants of an expansive range of ESG-related topics.
“ESG is recreating that connection,” he said. “But now is a great time to reconnect underwriters and asset managers instead of each following their own ESG pathways,” he argued.
His concern is that already stretched in-house investment teams may not have the resources to address the issue, especially at a time when some indicators point to a potential credit crisis.
“Now is a great time to reconnect underwriters and asset managers.”
Ghislain Perisse, Fidelity Investments
“I am worried because many insurer investment teams are very limited,” Perisse said.
He admits ESG considerations can be nuanced, complex and require a lot of resources to do well. This can also make it tough to set goals and targets for the industry.
It can be hard to leverage tools able to offer insights into how different strategies might perform in the future. When Fidelity consults on ESG asset management, it will often offer a perspective on a strategy or investment that differs from the insurer’s, he said.
“They see good, we might see mid-term deterioration; they see bad, and we might see evolution,” Piresse said. “People are relying on data, but the data is in the past.”
Fidelity chiefly offers advisor services to insurers on ESG reporting and regulations, tying it all to the standard set of investment risks and strategy concerns.
Images, from top: Shutterstock / Fahroni