AM Best has been one of the firt global rating agencies to become a signatory of the United Nations Environment Programme’s (UNEP) Principles for Sustainable Insurance (PSI).
“AM Best and its major affiliates are pleased to become a signatory to the UN’s Principles for Sustainable Insurance. The principles ‘serve as a global framework for the insurance industry to address environmental, social and governance risk and opportunities,'” said Arthur Snyder III, chairman, president & CEO of AM Best Co.
The insurance industry plays an important role in supporting sustainable economic and social development, said AM Best. Further, management of environmental, social and governance (ESG) efforts will strengthen the insurance industry’s contribution to building a resilient, inclusive and sustainable society, added the ratings agency, noting that its PSI membership is a significant step in this direction.
“We are delighted that the world’s first credit rating agency is also the first credit rating agency to sign the UN’s Principles for Sustainable Insurance (PSI),” said Butch Bacani, who leads the PSI at the UN Environment Programme. “As the largest credit rating agency specializing in the insurance industry, this is a clear and strong signal from AM Best that sustainability matters in the insurance business, that sustainability counts. In the final analysis, the bottom line is sustainability.”
“This fits both our focus on insurance and our continued perspective that ESG elements play an important role in the financial strength of an insurance company. We’ve long captured environmental and governance issues in our ratings opinions through catastrophe stress tests, A&E tests and ERM. ESG is a repackaging of these. Through the PSI, we are making a further commitment of disclosure and transparency to forward an ESG agenda,” said Matthew C. Mosher, president & CEO of AM Best Rating Services.
Endorsed by the UN secretary general, the principles have led to the largest collaborative initiative between the UN and the insurance industry — the PSI Initiative, AM Best continued. Over 140 organizations worldwide have adopted the four Principles for Sustainable Insurance, including insurers representing more than 25% of world insurance premium volume and US$14 trillion in assets under management.
The principles are part of the insurance industry criteria of the Dow Jones Sustainability Indices and FTSE4Good.