NU Online News Service, June 16, 4:11 p.m. EDT
A survey has found that 82 percent of risk managers believe the insurance industry should change its attitude to be more socially responsibility and cut the cost of "green" coverage products.
The survey was conducted by Aon brokerage and Andrew Tunnicliffe, chief operating officer of Aon Global Risk Consulting, speaking today at the Association of Insurance and Risk Manager's (AIRMIC) conference in Bournemouth, England, called upon the insurance industry to rethink its role to promote good corporate citizenship.
Insurers, he said should create "influential insurance" products at reduced premiums or with green policy terms.
Mr. Tunnicliffe said in a statement that insurers and brokers must think seriously about green product development to bring about positive consequences.
For example, he asked if the transfer of risk actually promotes reckless behavior. He said that delivering "influential insurance" will have a direct impact on behavior in the wider business community, but also will assist the insurance industry in achieving its own CSR goals.
Green insurance products he mentioned could include:
o Premium reward and coverage enhancement for hybrid cars or buildings constructed to be more robust against extreme weather events.
o Pollution legal liability and remediation cover.
o Specialist insurance for renewable energy projects.
o Health insurance products with reward systems for being healthy.
Additionally, he said risk management must complement insurance products to support the efforts of organizations' customer service representatives (CSRs).
Aon said a survey it did in 2008 revealed that 76 percent of companies had only a limited view of their suppliers' supply chain, leaving them exposed to reputational risks should the supplier turn out to be less than an ideal corporate citizen. Risk managers must request that their supply chain conforms to the CSR standards to which they prescribe, the brokerage said.
Mr. Tunnicliffe commented, "We cannot have 'organically grown' insurance policies or 'carbon neutral premiums' but the insurance industry has the power to influence and create a greener society. Some 97 percent of risk managers say their organization is committed to becoming socially responsible, while 71 percent recognize how this would have a material impact on shareholder value."
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