Riskier Times ahead for the Risk Carrying Business

Abstract

Governance is no longer singular - with an ‘E’ and an ‘S’ as prefixes - it adds up as ESG - Environment, Societal and Governance. The governance of insurance business too should encompass environmental and societal components. Together with banks and asset managers - particularly as investors in fossil fuel value chain - they aid1 climate change by insuring assets and activities that lead to it. Insurers ought to play the role of catalysts, through their ESG endeavours, precisely to facilitate such an outcome. Their investments and risk-carrying ability will support public goods projects and the scaling of equitable climate solutions. Like any other business - their boards ought to be climate competent and their executive compensation too be linked to the  environment and social outcomes.