Lloyd’s ESG loophole: low ESG syndicate owners granted highest growth

Lloyd’s is missing a step in its pursuit of ESG credentials, allowing the highest premium growth to syndicates owned by insurers with the lowest-ranking on ESG scales, analysts at Insurance Capital Markets Research (ICMR) have indicated.

Of the major insurer-owned syndicates, three of the top ten premium growers in 2022 came from syndicates with the worst-ranked ESG ratings from Morningstar unit Sustainalytics: China Re, GIC Re and QIC, all considered “high risk” on the Morningstar/Sustainalytics scales.

The five slowest growing insurer-owned syndicates came from the smallish group of only eight corporate owners meriting a “low risk” ESG ranking in the Morningstar/Analytics review.

“The parental ESG rating appears to have little bearing on Lloyd’s authorisation to grow syndicates’ premium footprints,” ICMR analysts wrote, citing “some of the largest” growth approved for the high risk group.

“Given the importance of listed (re)insurance companies to Lloyd’s capital, it does suggest the Corporation’s current hierarchy has yet to develop a holistic approach to ESG across all dimensions of the market,” analysts noted.

The eight “low-risk” corporate syndicate owners: Munich Re, AXA, The Hartford, Everest Re, SCOR, Hannover Re, Tokio Marine and QBE. Premium growth for AXA's unit was not listed.

Of the 32 insurer-owners, three others beyond AXA did not have premium growth for their Lloyd's syndicate listed. That included Greenlight Re, which joined GIC Re, China Re and QIC on the list of “high-risk” parents on the ESG scale.

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.