ESG actions by insurers are shifting from strengthening their own initiatives to supporting the ESG efforts of their investees and business partners. This trend is observed not only in the developed countries, but also in emerging Asian markets despite some differences among economies.
The ASEAN Insurance Congress held in November 2024 gathered about 150 participants including insurance regulators, insurers, industry associations, and experts from the 10 ASEAN economies and other major Asian countries, to engage in active discussions about the sustainable future for the insurance sector.
The sustainability panel was moderated by RIMM Sustainability founder and CEO and serial entrepreneur in the ESG field, Ravi Chidambaram. The panellists included Malaysian Re president and CEO Ahmad Noor Azhari Abdul Manaf, the Philippine Insurers and Reinsurers Association’s communications officer Marie Louise A. Lorenzo, and myself. The panel shared views on the current state of ESG in the Asian insurance sector and discussed how insurers can support stakeholders’ ESG efforts.
ESG trends and challenges in the Asian insurance sector
The panel viewed cross-industry collaboration as the key to creating impactful solutions and a shortcut to solving various sustainability challenges. It was also suggested that data-driven ESG integration could lead to risk reduction, regulatory compliance, and the exploration of new areas for insurance companies. Sustainability was emphasised as a strategic key for market expansion and meeting customer expectations rather than as just compliance actions.
From a reinsurance perspective, the panel regarded it important to carefully monitor and make underwriting and pricing decisions based on the ESG-related risks faced by primary insurers such as life and non-life insurers. These risks include increased mortality and morbidity rates due to climate change, and the increase and intensification of natural disasters.
Due to constraints on management resources, it is difficult for medium-sized and smaller insurance companies to individually disseminate ESG-related information, raise the awareness of consumers, and hold discussions with regulatory authorities. Therefore, industry associations’ initiatives, including the refinement of ESG-related risk management and disclosure, were considered important.
A common challenge for all insurers is how to support the ESG initiatives of the other stakeholders in the insurance industry. While the necessity of ESG initiatives is understood, many small and medium-sized enterprises (SMEs) are not able to take sufficient action due to a lack of knowledge and management resources. The focus was on how to support these SMEs.
Although solving this issue is not easy, attention was drawn to the collaborative efforts of Meiji Yasuda and RIMM Sustainability, which have started providing affordable and easy-to-implement ESG support services using DX/AI, which targets SMEs with limited management resources.
ESG scoring service by a Japanese life insurer
Meiji Yasuda has started offering an ‘ESG Scoring Service’ in collaboration with RIMM Sustainability, a startup based in Singapore, to provide Japanese SMEs the opportunity to engage in ESG initiatives.
When companies respond to 50-70 questions related to important ESG items or criteria established for each industry, they receive an ‘ESG Scoring Report’. This report provides scores on their efforts for each ESG item and lists recommended actions. In May 2024, this service was initially rolled out in major urban areas such as Tokyo, Aichi, and Osaka, targeting companies with 100 to 1,000 employees. As of the end of December 2024, approximately 60 companies have utilised this service.
Companies that received the scoring report commented that they could identify their ESG positioning and challenges compared to their peers and found it beneficial not only for business performance, but also for securing quality human resources. As the companies requested support for solving the issues, Meiji Yasuda started a matching service to introduce those companies to solution providers specialising in areas such as decarbonisation support, health management certification support, career education for women, as well as cyber security protection.
While life insurance companies have many customer touchpoints and extensive experience in supporting health management, it is extremely challenging to support the ESG initiatives of SMEs with limited management resources in terms of expertise and cost. Therefore, by collaborating and dividing the roles with startups and experts, including those overseas, Meiji Yasuda was able to provide affordable and user-friendly services in a relatively short period of time from the start of the initiative. Initially, the marketing approach was to reach out to individual target companies with some business connections. However, more recently, we have had opportunities to introduce the service at networking events where SMEs gather.
Towards the democratisation of SDGs
ESG should not be limited to large enterprises, and efforts should be made to ensure that SMEs supporting local communities in Japan are not left behind. This idea resonated with major players in Asia, and keywords such as “No one left behind” and “Sustainability for all” were emphasised at the ASEAN Insurance Congress.
These efforts may go beyond the traditional role of life insurers, but we hope to contribute to regional revitalisation. In the future, we are expanding our services to support companies in registering with the local government’s registration and certification systems and introducing reliable certification systems such as the ‘Sustainable Business Certification System’. A
Mr Shinichi Kishi is the general manager of sustainability management and development at Meiji Yasuda Life Insurance.