6 September 2017 Insurance

SCOR creates ‘scoring grid’ to make better judgements on environmental factors

To encourage what it calls sustainable underwriting, French reinsurer SCOR has created a so-called scoring grid to help insurance and facultative underwriters assess environmental, social, and governance (ESG) practices in sensitive sectors and lines of business.

The reinsurer said the grid combines internal and external measures and is integrated into SCOR’s underwriting and referrals systems. This all relates to its commitment to the management of climate risk and, in particular, its commitment to divest from companies highly reliant on coal.

The company said that, in relation to underwriting, SCOR believes that insurance, when paired with strong liability laws, is a highly effective tool to promote sustainability. Insurers’ risk management expertise encourages safer environmental practices, workplaces, products, land usage, lifestyles, and communities.

“For example, well-managed flood insurance discourages development in environmentally sensitive floodplains and barrier islands. Further, insurance provides an external stimulus to help communities recover more quickly from disaster,” the company said.

“SCOR supports efforts such as the Insurance Development Forum to improve resilience and close the protection gap for communities vulnerable to climate change.

“SCOR supports clients who demonstrate strong and/or improving ESG behavior and expects to continue to increase its support for renewable energy-related projects: To encourage sustainable underwriting.”

It added that SCOR will not issue insurance or facultative reinsurance that would specifically encourage new greenfield thermal coal mines or stand-alone lignite mines or plants. The only exception to this rule would be the implementation of cover for the benefit of the local community or workers.

Its commitment also covers its investment side where it has a commitment to the management of climate risk. In 2015, during COP21, it signed the “French Business Pledge” and divested from companies deriving more than 50 percent of their turnover from coal .

As of today, SCOR has no direct investments in companies deriving more than 30 percent of their turnover from thermal coal and has pledged to make no new investments in such companies in the future, it confirmed.

This commitment applies to all types of assets held within SCOR’s invested asset portfolio, including fixed income securities, equities, loans (including infrastructure loans), real estate and other investments.

Denis Kessler, chairman & chief executive of SCOR, said: “SCOR reaffirms that insurance plays a positive role in environmental sustainability. SCOR continues its commitment to sustainability and social responsibility, which began more than 15 years ago. As a global Tier 1 reinsurer, SCOR makes a significant contribution to the improved assessment and prevention of risks and to economic resilience in the event of loss. Further targeted disengagement from thermal coalintensive business, not only on the asset management side but also on the underwriting side, puts the Group at the forefront within the industry of the shift towards a post-carbon economy.”

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