ESG becoming mainstream in insurance market

Environmental, social and corporate governance issues are gaining momentum in the local insurance sector as insurers increasingly follow the global ESG trend.

In one of the latest moves, Samsung Fire and Maritime Insurance, the insurance arm of the nation’s largest conglomerate, set up a committee charged with making business decisions regarding ESG matters on Monday.

The new committee will enable the insurance firm to swiftly respond to demand for ESG, the company said.

“The committee will serve as a key driver for the firm’s ESG initiatives,” said a Samsung Fire and Maritime Insurance spokesperson, adding that the firm will continue to run in a socially responsible manner.

In the few past years, the Samsung Group affiliate has rolled out ESG-linked insurance services and launched a campaign to encourage paperless contracts and an initiative to reduce greenhouse gases.

In a meeting last month with Eun Sung-soo, chairman of the Financial Services Commission, domestic insurance companies collectively pledged to save energy, set environmentally friendly corporate policies and improve management transparency.

“The emerging ESG trend will provide the insurance industry with both opportunities and risks,” said FSC Chairman Eun, adding that the government expects insurers to play a leading role in paving the way for ESG-based business management and investment.

Hanwha Life Insurance also recently launched its own ESG committee to reduce nonfinancial risks by achieving sustainable growth, while Mirae Asset Life Insurance recently announced that it would revamp its business models to better respond to ESG matters. Kyobo Life Insurance has increased its ESG-related investments this year, including investments in renewable energy power generation.

“ESG-based business management and the insurance industry have something in common as both seek long-run sustainable growth,” said Chung Hee-soo, chairman of the Korea Life Insurance Association, in the February meeting.

By Kim Young-won (wone0102@heraldcorp.com)