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ESG insurance underwriting

Environmental, social, and governance (ESG) creates both risks and opportunities for property and casualty (P&C) insurers to grow their businesses, providing another lens through which to view risk selection and appetite.

The door is open for P&C insurers to build competitive advantage by establishing their own view of ESG risks, redefining risk appetites, and incorporating ESG into the decision-making process.

Insurers can also critically engage with their insured entities — especially those with emission-intensive activities — on their decarbonization strategies and net-zero transmission paths.

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What we do

Moody’s ESG insurance underwriting solution integrates indicators and scores to help commercial P&C insurers operationalize ESG risk assessment in their insurance underwriting workflows.

01
Assess your insured entity’s impact on the planet and society

Our integrated solution combines public and private company data, a double materiality assessment framework, and new analytics. These help insurers identify correlations between ESG factors and financial-risk metrics, such as claims frequency and loss ratios. 

02
Ensure no gaps in your portfolio

Our ESG company scores consider 273 data points and include monitoring and alerts for ESG risk events. Our database of 450 million company records, coupled with our ESG score predictor algorithms, enables us to provide ESG scores and sub-indicators for more than 290 million public and private companies.

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Speak to our team today

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How we help

01 ESG Underwriting Solution

ESG Underwriting Solution

Moody’s ESG Insurance Underwriting Solution integrates indicators and scores to help P&C insurers operationalize ESG risk assessment in their insurance underwriting workflows. Our integrated solution for portfolio managers and underwriters combines public and private company data, a double materiality assessment framework, and tailored analytics for insurers. These help insurers identify correlations between ESG factors and financial-risk metrics, such as claims frequency and loss ratios. This enables insurers to identify the accounts that contribute to portfolio-level ESG performance pre- and post-bind to help gain a competitive advantage.
 

Analyze, integrate, and differentiate your underwriting decisions

  • Analyze your portfolio from an ESG perspective using more than 338 million ESG scores for public and private companies.
     

  • Integrate our ESG data into your workflow and analyze it alongside your internal data to create a sustainable competitive advantage.
     

  • Benefit from our double materiality approach, which evaluates a company’s impact on the environment and the communities it serves, including shareholders, employees, and suppliers. including shareholders, employees, and suppliers.
     

  • Set risk appetites and tolerances and compare portfolio performance against your target outcome. Correlate ESG with internal data to inform risk selection and pricing.
     

  • Take advantage of our portfolio composition and point-of-underwriting risk analytics in your decision-making, pinpoint areas of concern, and identify business opportunities with the help of our intuitive dashboard.
     

  • Offer new differentiating value to your customers using the detailed information to explain your company’s risk selection process.
     


Unlock opportunity while mitigating risk

  • Build a tailored view of ESG risk and incorporate it into your workflows. Take a consistent approach to ESG analytics using reference and customized ESG scores and breakdowns.
     

  • Access reference and customized ESG scores, risk criteria, and data points throughout the underwriting process for new and renewed accounts to benefit from the consistent approach to ESG analytics.
     

  • Use the dashboard to understand trends and movements for specific insured entities to manage your portfolio and improve pricing decisions.
     

  • Report on ESG exposures to internal and external stakeholders.
     

  • Take advantage of the easy-to-use application programming interface to integrate data into your own technology.

02 Net Zero Underwriting module

Net Zero Underwriting module

Moody’s Net Zero Underwriting module is an extension of the Moody’s ESG Insurance Underwriting solution, providing (re)insurers with a detailed understanding of the greenhouse gas (GHG) emissions associated with their insurance underwriting portfolios. The solution is designed to assist customers in their efforts to meet the demands of the Partnership for Carbon Accounting Financials (PCAF) Accounting and Reporting Standard Target Setting Protocol. Our integrated solution combines Moody’s comprehensive corporate datasets, name matching, PCAF accounting calculations, and portfolio analytics.
 

Moody's Net Zero Underwriting module can help your company:

  • Calculate insurance-associated emissions (IAEs) and data quality scores to facilitate efforts to meet the PCAF Standard with fully transparent calculation methodology and data sources.
     

  • Access comprehensive emissions and revenue data, allowing you to ensure portfolio target boundaries reflect a material and relevant portion of your portfolios.
     

  • Identify and validate the correct insureds in a portfolio using advanced name-matching capabilities.
     

  • Flexibly drill down to analyze and report emissions by industry, sector, and geography.
     

  • Build decarbonization targets in line with your commitments.
     

  • For (re)insurers, help you understand and explain volatility in IAEs over different reporting dates.

ESG Underwriting Solution

Moody’s ESG Insurance Underwriting Solution integrates indicators and scores to help P&C insurers operationalize ESG risk assessment in their insurance underwriting workflows. Our integrated solution for portfolio managers and underwriters combines public and private company data, a double materiality assessment framework, and tailored analytics for insurers. These help insurers identify correlations between ESG factors and financial-risk metrics, such as claims frequency and loss ratios. This enables insurers to identify the accounts that contribute to portfolio-level ESG performance pre- and post-bind to help gain a competitive advantage.
 

Analyze, integrate, and differentiate your underwriting decisions

  • Analyze your portfolio from an ESG perspective using more than 338 million ESG scores for public and private companies.
     

  • Integrate our ESG data into your workflow and analyze it alongside your internal data to create a sustainable competitive advantage.
     

  • Benefit from our double materiality approach, which evaluates a company’s impact on the environment and the communities it serves, including shareholders, employees, and suppliers. including shareholders, employees, and suppliers.
     

  • Set risk appetites and tolerances and compare portfolio performance against your target outcome. Correlate ESG with internal data to inform risk selection and pricing.
     

  • Take advantage of our portfolio composition and point-of-underwriting risk analytics in your decision-making, pinpoint areas of concern, and identify business opportunities with the help of our intuitive dashboard.
     

  • Offer new differentiating value to your customers using the detailed information to explain your company’s risk selection process.
     


Unlock opportunity while mitigating risk

  • Build a tailored view of ESG risk and incorporate it into your workflows. Take a consistent approach to ESG analytics using reference and customized ESG scores and breakdowns.
     

  • Access reference and customized ESG scores, risk criteria, and data points throughout the underwriting process for new and renewed accounts to benefit from the consistent approach to ESG analytics.
     

  • Use the dashboard to understand trends and movements for specific insured entities to manage your portfolio and improve pricing decisions.
     

  • Report on ESG exposures to internal and external stakeholders.
     

  • Take advantage of the easy-to-use application programming interface to integrate data into your own technology.

Net Zero Underwriting module

Moody’s Net Zero Underwriting module is an extension of the Moody’s ESG Insurance Underwriting solution, providing (re)insurers with a detailed understanding of the greenhouse gas (GHG) emissions associated with their insurance underwriting portfolios. The solution is designed to assist customers in their efforts to meet the demands of the Partnership for Carbon Accounting Financials (PCAF) Accounting and Reporting Standard Target Setting Protocol. Our integrated solution combines Moody’s comprehensive corporate datasets, name matching, PCAF accounting calculations, and portfolio analytics.
 

Moody's Net Zero Underwriting module can help your company:

  • Calculate insurance-associated emissions (IAEs) and data quality scores to facilitate efforts to meet the PCAF Standard with fully transparent calculation methodology and data sources.
     

  • Access comprehensive emissions and revenue data, allowing you to ensure portfolio target boundaries reflect a material and relevant portion of your portfolios.
     

  • Identify and validate the correct insureds in a portfolio using advanced name-matching capabilities.
     

  • Flexibly drill down to analyze and report emissions by industry, sector, and geography.
     

  • Build decarbonization targets in line with your commitments.
     

  • For (re)insurers, help you understand and explain volatility in IAEs over different reporting dates.

ESG analytics in ExposureIQ™

By using ESG analytics in the ExposureIQ application, (re)insurers can now be equipped with the tools and capabilities to help take a significant step forward in delivering upon ESG commitments.

Announcements

ESG insurance underwriting
Cincinnati Global Underwriting Agency Ltd selects Moody's

Cincinnati Global Underwriting Agency Ltd has selected Moody’s for its ESG scoring to support the integration of ESG risk assessment into its underwriting and risk manageme

Read more
ESG insurance underwriting
Ascot Group selects Moody's 

Ascot Group, one of the world’s pre-eminent specialty risk assumption organizations, has selected Moody’s ESG Underwriting Solution to help develop its framework for underwriting.

Read more
ESG insurance underwriting
Moody’s announces collaboration with reinsurer RenaissanceRe to enhance sustainability-related underwriting insights

The initiative combines Moody’s sustainability and financial data, models, and analytics with RenaissanceRe’s underwriting and climate expertise.

Read more
ESG insurance underwriting
Chaucer announces new collaboration with Moody’s to revolutionize the way businesses manage their ESG profiles

The collaboration — the first of its kind in the (re)insurance sector — elevates the way companies’ ESG credentials are assessed using robust propriety data and metrics.

Read more

FAQs

01 What is ESG underwriting?

What is ESG underwriting?

Moody’s ESG Insurance Underwriting solution helps P&C insurers operationalize ESG risk assessment in their insurance underwriting workflows.

02 How does ESG underwriting work?

How does ESG underwriting work?

(Re)insurers use the insured’s ESG performance scores in their underwriting and portfolio management decision-making processes. This acts as an extra datapoint in the pre-bind risk selection based on their own view of ESG risk. In addition, post-bind, (re)insurers can engage with their insureds, explain their approach to ESG, and obtain information on transition plans.

03 Why is ESG underwriting important?

Why is ESG underwriting important?

P&C firms face increasingly complex and interconnected risks, including those arising from ESG factors. Additionally, (re)insurers need to effectively demonstrate how they identify, manage, and mitigate these risks as well as demonstrate their net-zero commitments, especially where reputational risks are high. In addition, new avenues of capital-raising can be explored where ESG transparency is needed.

04 What are the benefits of ESG underwriting solutions?

What are the benefits of ESG underwriting solutions?

With growing societal, governmental, and consumer attention, P&C insurers are just beginning to understand how ESG affects everyday business operations. P&C insurers can gain a competitive advantage by creating their own view of ESG risks.

By gaining perspective on ESG risk drivers in their portfolios, insurers can redefine risk appetites and incorporate ESG factors into underwriting and pricing decision-making processes. By reinforcing their expertise in ESG underwriting, (re)insurers can more meaningfully engage with their insureds — especially those with emission-intensive activities — on their decarbonization strategies and net-zero transmission paths.

05 What are the key component of an ESG underwriting framework?

What are the key component of an ESG underwriting framework?

The three pillars of an ESG insurance underwriting framework combine public and private company data, risk assessment, and analytics.

  • Data management and validation: This includes corporate data on both public and private entities. This is necessary for insurers to identify the correct insured entity, unlocking the main information and datapoints.
     

  • ESG risk assessment: Capture additional ESG-related information to make an ESG risk assessment. This requires insurers to redefine their underwriting risk appetites. An assessment typically combines a multi-step approach using ESG scores, ESG data, revenue data, and an overall assessment against defined criteria and categories.
     

  • Analytics: Portfolio composition and point-of-underwriting risk analytics derived from the risk assessment help insurers identify the accounts that contribute to portfolio-level ESG performance both pre- and post-bind.

06 What are the main challenges for ESG underwriting?

What are the main challenges for ESG underwriting?

Common challenges include linking the insured entity to an ESG score and providing ESG scores for private entities.

Insurers are good at knowing what is insured, but there can be data challenges tracking who is ultimately insured. This usually arises from a lack of information provided at pre-bind, especially where data is provided via binders (a written copy of the binding agreement between the insurer and the insured). This creates complications when trying to tie the ultimate insured to an ESG score, especially where some companies may contain similar names to others or data input errors.

For ESG scores, most insured portfolios are composed of public and private entities. Private entities are much less likely to participate in ESG reporting compared with a major corporation such as a Fortune 500 or FTSE 100 company.

The solution to both issues is to source ESG data from vendors who can also provide a name-matching service to ensure the correct ESG score is applied to the relevant insured entity.

07 How can ESG data be incorporate into underwriting processes?

How can ESG data be incorporated into underwriting processes?

Approaches differ by insurer and are aligned to their own policies, procedures, and processes. Insurers need sufficient datapoints for each prospective insured to support high-quality ESG scores across the portfolio of insureds, particularly for unlisted companies.

The right data on private and public companies is essential. For example, the underwriting process requires data to identify the correct insured entity, unlocking the appropriate ESG score and datapoints to build an understanding of ESG’s impact on the portfolio.

Information then flows to the assessment framework, integrating ESG scores into underwriting selection decisions. Insurers can also add their own views of ESG risk and specific customer weighting for ESG factors. Finally, all the data and decisions made feed reporting on ESG performance to internal and external stakeholders.

08 What are some examples of ESG underwriting solutions in the market?

What are some examples of ESG underwriting solutions in the market?

ESG solutions for insurance underwriting vary from raw ESG data to the application of solutions from the investment side to integrated ESG underwriting solutions.

ESG underwriting solutions cover data, analytics, and technology tailored specifically to address the challenges P&C insurers face. Achieved progress includes:

  • The development of commercial ESG data solutions such as Moody’s collaboration with Chaucer to create the ESG Insurance Underwriting Solution.

  • Collaborative efforts to standardize the data collected from policyholders. Each organization then decides how to use the data.
     

  • Sector-specific emissions data initiatives such as the Poseidon Principles for Marine Insurance.

09 How can ESG underwriting help mitigate risk for investors?

How can ESG underwriting help mitigate risk for investors?

ESG underwriting helps mitigate risk by providing investors with an unbiased view of the underwriting portfolio from an ESG perspective.

10 What is the future of ESG underwriting?

What is the future of ESG underwriting?

As P&C (re)insurers continue their ESG underwriting initiatives, the door is open to build competitive advantages and identify new business opportunities by imposing their own views of ESG underwriting risks, redefining risk appetites, incorporating them into the decision-making process, and critically engaging with insureds.

What is ESG underwriting?

Moody’s ESG Insurance Underwriting solution helps P&C insurers operationalize ESG risk assessment in their insurance underwriting workflows.

How does ESG underwriting work?

(Re)insurers use the insured’s ESG performance scores in their underwriting and portfolio management decision-making processes. This acts as an extra datapoint in the pre-bind risk selection based on their own view of ESG risk. In addition, post-bind, (re)insurers can engage with their insureds, explain their approach to ESG, and obtain information on transition plans.

Why is ESG underwriting important?

P&C firms face increasingly complex and interconnected risks, including those arising from ESG factors. Additionally, (re)insurers need to effectively demonstrate how they identify, manage, and mitigate these risks as well as demonstrate their net-zero commitments, especially where reputational risks are high. In addition, new avenues of capital-raising can be explored where ESG transparency is needed.

What are the benefits of ESG underwriting solutions?

With growing societal, governmental, and consumer attention, P&C insurers are just beginning to understand how ESG affects everyday business operations. P&C insurers can gain a competitive advantage by creating their own view of ESG risks.

By gaining perspective on ESG risk drivers in their portfolios, insurers can redefine risk appetites and incorporate ESG factors into underwriting and pricing decision-making processes. By reinforcing their expertise in ESG underwriting, (re)insurers can more meaningfully engage with their insureds — especially those with emission-intensive activities — on their decarbonization strategies and net-zero transmission paths.

What are the key component of an ESG underwriting framework?

The three pillars of an ESG insurance underwriting framework combine public and private company data, risk assessment, and analytics.

  • Data management and validation: This includes corporate data on both public and private entities. This is necessary for insurers to identify the correct insured entity, unlocking the main information and datapoints.
     

  • ESG risk assessment: Capture additional ESG-related information to make an ESG risk assessment. This requires insurers to redefine their underwriting risk appetites. An assessment typically combines a multi-step approach using ESG scores, ESG data, revenue data, and an overall assessment against defined criteria and categories.
     

  • Analytics: Portfolio composition and point-of-underwriting risk analytics derived from the risk assessment help insurers identify the accounts that contribute to portfolio-level ESG performance both pre- and post-bind.

What are the main challenges for ESG underwriting?

Common challenges include linking the insured entity to an ESG score and providing ESG scores for private entities.

Insurers are good at knowing what is insured, but there can be data challenges tracking who is ultimately insured. This usually arises from a lack of information provided at pre-bind, especially where data is provided via binders (a written copy of the binding agreement between the insurer and the insured). This creates complications when trying to tie the ultimate insured to an ESG score, especially where some companies may contain similar names to others or data input errors.

For ESG scores, most insured portfolios are composed of public and private entities. Private entities are much less likely to participate in ESG reporting compared with a major corporation such as a Fortune 500 or FTSE 100 company.

The solution to both issues is to source ESG data from vendors who can also provide a name-matching service to ensure the correct ESG score is applied to the relevant insured entity.

How can ESG data be incorporated into underwriting processes?

Approaches differ by insurer and are aligned to their own policies, procedures, and processes. Insurers need sufficient datapoints for each prospective insured to support high-quality ESG scores across the portfolio of insureds, particularly for unlisted companies.

The right data on private and public companies is essential. For example, the underwriting process requires data to identify the correct insured entity, unlocking the appropriate ESG score and datapoints to build an understanding of ESG’s impact on the portfolio.

Information then flows to the assessment framework, integrating ESG scores into underwriting selection decisions. Insurers can also add their own views of ESG risk and specific customer weighting for ESG factors. Finally, all the data and decisions made feed reporting on ESG performance to internal and external stakeholders.

What are some examples of ESG underwriting solutions in the market?

ESG solutions for insurance underwriting vary from raw ESG data to the application of solutions from the investment side to integrated ESG underwriting solutions.

ESG underwriting solutions cover data, analytics, and technology tailored specifically to address the challenges P&C insurers face. Achieved progress includes:

  • The development of commercial ESG data solutions such as Moody’s collaboration with Chaucer to create the ESG Insurance Underwriting Solution.

  • Collaborative efforts to standardize the data collected from policyholders. Each organization then decides how to use the data.
     

  • Sector-specific emissions data initiatives such as the Poseidon Principles for Marine Insurance.

How can ESG underwriting help mitigate risk for investors?

ESG underwriting helps mitigate risk by providing investors with an unbiased view of the underwriting portfolio from an ESG perspective.

What is the future of ESG underwriting?

As P&C (re)insurers continue their ESG underwriting initiatives, the door is open to build competitive advantages and identify new business opportunities by imposing their own views of ESG underwriting risks, redefining risk appetites, incorporating them into the decision-making process, and critically engaging with insureds.

News and views

podcast
Moody's
Implementing ESG in the insurance and underwriting space

Listen in as experts from Moody’s, Chaucer Group, and Cytora talk through the relevance of ESG data in insurance, the need for standardized data, and how the industry can unite to create a more sustainable future.

Listen
whitepaper
Moody's
How to develop and integrate an ESG strategy

Environmental, social, and governance issues have undoubtedly become key priorities for (re)insurers. However, most action to date has focused on internal operations, regulatory requirements, and the asset side of the balance sheet. 

Read more
whitepaper
Moody's Ratings
Incorporating ESG into P&C underwriting: owning the risk appetite

Long considered an “emerging risk” for insurers, environment, social, governance, and climate (ESG-C) risks are now one of the most talked-about topics in the insurance industry. As such, the importance attached by senior management to this topic has increased.

Read more
case study
Moody's
Argenta adopts Moody’s ESG insurance underwriting solution

Argenta has selected Moody’s ESG Insurance Underwriting Solution. Argenta will leverage Moody’s advanced name-matching, comprehensive sustainability, and financial data within the ExposureIQ™ application to measure ESG impacts and carbon emissions in the underwriting and investment portfolios.

Read more
article
Moody's
State of the market: integrating ESG into portfolio management and underwriting workflows

As insurers move toward automation and further digitization of their underwriting processes, accurate data and sophisticated analytics are becoming increasingly important. One area in which this is particularly crucial is environment, social, and governance (ESG).

Read more
podcast
Moody's
Panel debate: enabling measurable action in the insurance underwriting ESG journey

In a first-of-its-kind collaboration, specialty (re)insurer Chaucer joined forces with Moody’s to create a data-driven ESG scorecard designed to improve the way firms' ESG credentials are assessed using proprietary data and metrics.

Watch now
article
Insurance-associated GHG emissions: the PCAF measurement standard

November 2022 saw the Partnership for Carbon Accounting Financials (PCAF) launch the first global measurement standard for insurance-associated greenhouse gas (GHG) emissions. Insurance-associated emissions (IAEs) are a type of Scope 3 emissions associated with an insurer’s or reinsurer’s underwriting activities.

Read more
article
What is net zero underwriting? 

We’ve answered important questions about net zero underwriting.

Read more

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