The Insurance Industry Must Champion Sustainability

The insurance industry is a driver of social and economic activity and, as such, has the mechanisms and incentives in place to facilitate sustainable business activity on a macro level. However, through a global survey of the insurance industry, we learn factions of the insurance industry possess a cognitive model that makes the industry vulnerable to the emerging risks derived from the environmental, social, and governance (ESG) factors of sustainability. These factions are willing to rely on extant policies and underwriting practices to manage sustainability issues that are inherently different in their frequency, controllability, and severity. Alternatively, senior members of the industry report that ESG issues do influence underwriting activities, but the continued resilience of the industry to these issues requires a systematic integration of various stakeholders' perspectives. © 2013 Wiley Periodicals, Inc.