ESG tipped to become a strategic priority for the insurance sector

According to Grant Peters, EY Oceania insurance leader, ESG is going to be a significant strategic priority for the insurance sector in 2022 and beyond, particularly the impact of net-zero commitments on their customers and the flow-on effects of this on their own business strategies.

Mr Peters also expects the regulatory agenda to again warm up for Australian insurers, with a particular focus around customer outcomes and operational risk management.

“A number of legislative and regulatory changes made during 2020, such as Product Design and Distribution Obligations (DDO) and claims as a financial service, have yet to fully play out in the market and insurers will be working on embedding these requirements into their businesses,” Mr Peters said.

“Business continuity insurance is also likely to remain a major focus area for some parts of the insurance industry in the wake of the pandemic. Several legal test cases are yet to play out, and insurers will be watching this space closely to determine the potential implications for their policies and claim commitments.”

More broadly, Mr Peters believes the customer-centric focus that is now a priority for the entire financial services sector is equally applicable for insurers. As is the focus on digitisation and operational resilience, he said.

“Looking further ahead, insurers will also be keeping their eyes on a few next horizon topics such as developments in and take up of electric and self-drive vehicles, and the use of AI to improve customer experience and business operations.”