Insurance companies: sustainability impact for protecting from the unexpected
How the top listed Aussie insurers stack up in the sustainability stakes.
We look at the top 4 listed health insurance companies operating here in Australia to measure the pulse of their sustainable impact.
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Insurance: A beneficial service without much positive sustainability impact.
Insurance is a mechanism for protection from the unexpected. With the black swan event of COVID-19 making us more conscious of our health and health risks than ever before, something you may have thought about recently is your health insurance policy.
You don't need private health insurance to cover you in the hospital if you have COVID-19, and with many elective surgeries suspended in some states, some are wondering whether to keep or drop their insurance.
We thought it timely to look at the top 4 listed health insurance companies operating here in Australia to measure the pulse of their sustainable impact.
Australia’s health insurance industry scores lower in sustainability than the Sustainable Platform database average (of over 17,000 listed companies across all industries globally), with the group average SDG score coming in at 33.
Why so low you might ask? With insurance companies, we consider what they actually spend on providing benefits to customers, i.e. claims paid vs. premiums earned.
Additionally, only some of their benefits actually contribute to people’s basic needs, such as in the case of car insurance (transport) and home and contents insurance (housing).
Insurance for commercial properties, credit and bond, for example, are considered neutral from a sustainability perspective.
The leader in the group is Sydney based multinational Insurance Australia Group Ltd, with a score of 37.
Following IAG is Swiss insurance company Zurich Insurance Group AG with a score of 36. Just behind is German multinational financial services company Allianz SE, with a score of 33.
Finally, also below the SP database average, is Australia’s second largest insurance group, QBE Insurance Group Ltd, with a score of 27.
Three of the four companies analysed have controversial industry exposure. Allianz SE, Insurance Australia Group Ltd and QBE Insurance Group Limited have a small exposure to fossil fuels, mainly coal and oil.
The sector's largest contribution to sustainability by far is surprisingly to the basic needs of housing.
This points to the other insurance products on offer other than healthcare. These companies also contribute to sustainability in relation to transport and health.
Because of this, all of them score highly on SDG Goal 11: Sustainable Cities and Communities and SDG Goal 1: No Poverty. The third largest SDG influenced by the group is SDG Goal 3: Good health and well-being.
*All SDG score and data are provided by Sustainable Platform based on data as at 14 August 2020.
Top contributing goals
Of all the 17 SDGs, the top 4 listed insurance groups operating in Australia contribute most to these below goals:
SDG 1: No Poverty
SDG 3: Good Health & Well-being
SDG 11: Sustainable Cities and Communities
Find out more about the Sustainable Development Goals (SDGs).
Sustainable Platform is a sustainability information service only to institutional investors and doesn’t provide general or personal financial advice.