ESG is not yet an important factor for finance brokers in their relationships with insurers, a new report claims.
ESG is a leading theme within the industry for which brokers and insurers will need to have clear strategies to continue to attract customers, but it is not yet vital while completing partnerships, says GlobalData.
GlobalData’s 2023 UK Broker Insurance Survey, conducted in Q1 2023 with 250 respondents, found that when asked to select the best in class for the ESG theme, only 24.7 per cent of respondents could. Just under three quarters (73.7 per cent) said they did not know (1.7 per cent actively chose ‘none’). The leader was Aviva, though it received just 10.4 per cent of total responses.
“This level of uncertainty suggests that brokers do not consider ESG to be essential when working with insurers, as very few brokers are able to identify insurers who are strong in the area,” said Ben Carey-Evans, senior insurance analyst at GlobalData
Furthermore, when asked for factors behind choosing to work with an insurer, being strong in ESG received no responses. The top answers for this question were flexibility in underwriting cover (23.5 per cent), claims service quality (19.9 per cent), price of premiums (17.9 per cent), the quality of the insurer’s product material (8.0 per cent), and speed of response to queries/quotes (7.6 per cent). This shows that day-to-day business concerns are still far more important than the more long-term ESG and sustainability theme in the eyes of brokers.
Carey-Evans concludes: “It will be difficult for ESG to ever be as important to brokers as these immediate factors, but our data shows that any insurer still has a clear opportunity to establish itself as a leader. Brokers being unable to pick clear leaders within this critical theme suggests that anyone who prioritises it can stand out in the theme relatively quickly. The more innovation and progress that brokers see from insurers, the more likely they are to prioritise it as a factor in building relationships, especially as the theme is only going to grow in importance.”