Integration of ESG factors into the insurance business
As a signee of the UNGC e PSI, the Group has formalised the adoption of an ESG risk identification and tracking system in its Non-Life/Life underwriting ESG policies in the various economic sectors and in relation to various segments, products and insurance cover to allow for the proper and timely assessment of exposure to risks, defining responsibilities and consequent actions.
The policy contains criteria and methods that define when a business relationship may imply a “sustainability risk” from both a technical standpoint and with respect to reputational risk.
In order to identify high risk business relationships at the agreement stage, a process was established comprising 2 due diligence mechanisms:
- the online reporting tool (ESG Score) that uses a data-driven approach to allow brokers to identify/view potentially sensitive business relationships, incorporating a summarised evaluation of the ESG result of each interlocutor (ESG score) into the risk assumption process, on the basis of which a definition is made of the compatibility or lack of compatibility of the ESG risks connected to the business relationship with the approach to sustainability and risk management goals of the Group. Once a critical threshold has been exceeded, the broker is given clear instructions on how to evaluate the negotiations.
- the evaluation or preliminary inquiry tool: the transactions identified as more critical are transferred to the sustainability team who carry out or request the necessary in-depth investigation in order to define, with the help of the risk management and business departments, consistent choices (continue, refuse, engagement with the customer or more in-depth investigation using targeted research) with the corporate vision with respect to the cases presented.
The Group regularly presents a selection of the actions taken relating to the incorporation of the ESG factors into the Non-Life and Life underwriting activities in the sustainability reports.
Engagement with customers
The role of insurance is to understand customers’ activities and work together to ensure the adoption of responsible, sustainable business practices. In order to do this, Unipol checks to ensure there are adequate controls and improvement plans made by customers against weaknesses in the management of the ESG factors or severe breaches. Dialogue is implemented at both individual level with potential customers and also carried out through trade associations and institutions to share experiences and expertise.
Tracking
The volumes and types of sustainability risks in business relations are monitored, and the results of the risk evaluation and efforts made to reduce the risk are constantly tracked and analysed. The tracking also checks to ensure that the businesses that are excluded or considered sensitive by the Policy are adequately treated. The criteria to identify and evaluate the ESG risks in the various economic sectors and in relation to the various businesses, products and insurance cover are also in the manuals, information storage media (guidebooks/FAQs) available in the network. A course on the management and reporting of sustainability risks is also available for employees and brokers.
Human Rights
The approach to ESG risks in the business relations of an insurance nature also includes the issue of Human Rights. Please refer to the section HUMAN RIGHTS to learn more about the Group’s position on this issue