Encouraging tomorrow – a sustainable view of risk

In its 15th sustainability report, Allianz outlines the relevance of climate change, social inclusion and ESG for customers. The number of environmental, social and governance (ESG) referrals influencing the way we do business tripled. ESG expert Michael Bruch explains the impact on our clients.


“Encouraging tomorrow” appears on the cover of the Allianz Group’s Sustainability Report published today. ESG expert Michael Bruch and his team are a good example of what this means to our daily activities. As the center of competence for global Property & Casualty insurance, they assess particularly sensitive environmental, social and governance (ESG) risks, and develop solutions for and with our customers. Their work has nearly tripled in the past year.
Mr. Bruch, which sectors are sensitive for Allianz and why?
Together with non-governmental organizations, we have identified 13 sectors over the last few years that are especially exposed to environmental, social and governance risks. These include mining, hydro dams, infrastructure, oil and gas, and nuclear as well as topics like human rights and defense. We have developed detailed criteria for all these sectors and topics, and applied them to all our business since 2014. As a concrete example, hydro dam construction entails resettling the affected population, and addressing the negative effects on biodiversity as well as occupational safety at the construction site.

Encouraging Tomorrow – Allianz Sustainability Report 2015
How is such an ESG review conducted?
We begin by researching various public sources and non-public databases. In doing so, we apply concrete ESG criteria developed for the 13 sensitive sectors. We assess how well the customer has dealt with significant points of criticism and controversies such as whether they conducted environmental impact assessments and, if so, what results they produced. In case of doubt, we request documents and examine them. Another possible step is to conduct a risk dialog with the customer to discuss unanswered questions and potential solutions.
Do your customers like it when you probe them in this way?
Our case-by-case reviews cost time – always for our experts and for the customer as well if we have to request additional documents, conduct further on-site tests or initiate a risk dialog. But this effort is justified. Risks need to be better understood so that they can either be avoided altogether or at least reduced. In principle, almost any unforeseeable risk can be insured; it is only a question of price. But to make insurance sustainable takes better and more comprehensive risk management. And our customers also benefit from this. This approach is being increasingly accepted and has already become well-established. In the insurance segment for commercial and industrial clients, we reviewed 405 companies and projects in our sensitive sectors in 2015; nearly three times as many as in the preceding year. Half of the referrals assessed in detail were signed off only conditionally. These restrictions ensure that risks are better managed and that customers can leverage our expertise. One of them was an oil drilling company with which we had been dialoging for more than two years. This enabled us to support the customer’s risk management strategy as well as reach a better understanding of the type of insurance services we could offer. Our customer was surprised by the effort at first, but then very satisfied with the result.
Read the full Sustainability Report.
Michael Bruch, ESG expert at Allianz Global Corporate and Specialty
Michael Bruch, ESG expert at Allianz Global Corporate and Specialty

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