U.S. insurance companies appear to be rapidly incorporating ESG factors into their investment strategies, according to a recent survey of U.S. insurance decision makers conducted for Conning.
Nearly 80 percent of survey respondents indicated that their firms began addressing ESG concerns within the last two years. The greatest influencer behind the move – slightly ahead of regulatory concern – is the insurers’ corporate reputation, the survey reported.
While ESG appears to be more important to insurance investment practices, it only adds to the portfolio challenges insurers are facing such as inflation, regulation, RBC changes and fiscal and monetary policy. The growing complexity will likely drive a need for more help from asset managers with deep experience in insurance portfolio management as well as a rich understanding of ESG investment principles.