The green agenda is ‘a virtuous circle’
21st June 2022Tweet
The climate change targets facing the insurance industry are daunting – but they are not insurmountable.
That was the view of Michael Porter, SVP International, CoreLogic, who presented a keynote address to delegates at the ILC specialist conference, The Environmental Challenges of Property Claims, which took place at etc.venues, in London on 9 June.
Supported by headline sponsor CoreLogic and sponsors Gateley Vinden, Polygon, QuestGates, RSK Group and JCS Jewellery, along with ILC home and property division corporate partners Carpenters Group, Claims Consortium, CoreLogic, ICAB, Innovation Group and Sedgwick, the event brought together around 150 industry professionals from across the sector to consider the impact of sustainability on home claims.
Michael said, “There is a lot we have to do in order to achieve our 2050 objectives, but it helps to consider how much has changed in the last 30 years. The internet didn’t exist as a commercial platform in 1990, Germany had just been unified and Nelson Mandela just released from prison. So it’s clear that we have driven a huge amount of change in society and behaviours in that time.”
He explained that with the rate of fossil fuel consumption rising each of the last 12 years apart from 2020, when the planet was in lockdown, and continued increases expected for the rest of the decade, significant change will be needed again to slow and then reverse climate change.
He said, “But in 1990 we also discovered a hole in the Ozone Layer. That’s virtually been fixed now, which just proves that real change is possible with the right motivation.”
Governments and international pacts such as the Paris Agreement are establishing the protocols for this change, but, Michael believes, the real motivation will be a groundswell of public opinion.
He pointed to research that found 43% of consumers had already changed brands based on environmental values, 64% of Generation Z’s would pay more for an environmentally-friendly product, while the environment was the second greatest concern for both millennials and Generation Z’s, only recently overtaken by the cost of living.
Michael said, “I believe as much as regulation and legislation is a catalyst, it is consumer attitudes that will make a difference in the long term.”
In response to this shift in attitudes, 70% of European insurers are now investing in sustainable products and 122 have already signed up to the UN environmental programme for sustainable insurance.
“This is creating a virtuous circle,” Michael continued. “Consumers are driving the behaviours of insurers, insurers are driving the behaviours of their supply chain, and the supply chain is delivering more sustainable solutions to the policyholders themselves.”
However, if insurers are going to continue to make the environmental gains the market expects of them, they will need support from the wider supply chain, both in terms of carbon reduction and innovation. Michael believes that businesses who do not support this agenda will quickly find themselves becoming irrelevant.
He said, “At CoreLogic we measure our value as a technology provider to the UK insurance market in three ways: impact on expense ratio, ability to help insurers control indemnity, and how we help our customers deliver service. But there is now a fourth thing – sustainability.”
However, he explains that sustainability should not be viewed as a new and separate core value, but an intrinsic element of the company’s existing values. He believes that real progress can only be made by integrating sustainability with what CoreLogic already delivers. As an example, he pointed to the implementation of live video, a decision which was based primarily on customer impact and cost reduction, but which also drove the company’s sustainability agenda.
He said, “It is about aligning sustainability as a core value measure. We don’t do it because we’re being told to, but because it’s the right thing to do and it’s good for business.”
One area where CoreLogic is already leading the way is in data, particularly in relation to assessing mortgage risk in the North American market, where extreme weather such as wildfires, tornados and drought have a severe impact on claims.
He explained that mortgage risk assessments need to look 30 years into the future, but CoreLogic scientists are now delivering predictive modelling for localised climate risks that also take into consideration what preventative measures might be taken in the next two decades.
Michael concluded, “We’re taking a leading role in terms of the data insight provided around climate change, and we’re starting to really change the way we ourselves operate to meet this challenge and drive better results for our customers and more visibility of our values.”Tweet