Furthermore, the research highlights that amongst most insurers, the expectations of asset managers are increasing. Today, most sustainable investment policies already extend to outsourced assets (81% of European respondents), and ESG criteria are increasingly included in RFPs (35% of European respondents).
More so than in other European markets, UK respondents, particularly smaller insurance companies, highlighted that they will rely heavily on their asset managers’ expertise and services to stay up to speed with regulatory and market evolutions. In particular, they are looking to their asset managers to address two key challenges: effectively managing risks and contributing to solutions.
Aileen continued:
“It’s crucial for us as insurance asset managers to have a coherent house view on our sustainable practices and demonstrate to insurers how this is integrated and measured within our investment processes. Our actions go beyond the publication of ESG policies and reporting as we help our clients navigate and understand extra-financial risks – particularly regarding climate change – and how to contribute to sustainable objectives through their investments.
“Our ESG analysts work alongside our fund managers to exploit ESG data to improve risk management, ensuring our clients’ solutions are resilient and sustainably fit for the long-term. Most notably, we are seeing some consideration of a shift to climate benchmarks or the inclusion of more specific ESG related mandates in our clients’ equity and fixed-income mandates. We are also seeing an increase in the interest of private ‘impact’ assets and innovative listed instruments such as green bonds, as we integrate country ESG analysis into our government bond strategies. This demonstrates that we are aligned with our clients in our approach as we work together with them to co-construct ESG and impact investment solutions.”
