Axa and the Association of British Insurers (ABI) have called for life and health insurers to consider disinvesting and disengaging from the tobacco industry and other companies whose businesses do significant harm to global health.
Speaking at the launch of the UN Environment Programme’s Principles for Sustainable Insurance (PSI) report, the duo emphasised the importance of insurers driving better health outcomes for their people around the world.
Axa Group Risk Management head of individual health Samia Hachicha Charfi said insurers must lead by example and “fight” unhealthy lifestyles.
Citing earlier comments about the importance of smoking as a harmful lifestyle, she said: “When you are a health insurer you have to fight such a lifestyle.
“So disengaging from investing in smoking, disengaging from underwriting for tobacco companies.
“These are the kind of actions that an insurance player could start.”
This was echoed by ABI senior policy adviser for prudential regulation Rebecca Lea who stated that life and health insurers need to look more closely at the wide range of companies they invest in and the affect they have on the health of the general population.
“We do a lot of work with our members focusing on the impact their investments can have in environmental, social and governance (ESG) priorities and what work their stewardship can have in getting invested companies to move along that journey,” she said.
“For life and health insurers there’s huge portfolios of investments and this is definitely a key area which we should see more focus on.
“It’s looking at your invested companies, what impact do they have on the general population’s health?
“Tobacco is a really clear obvious example, but the data is really clear and we’ve had 50 years to look at that.
“There are other things, say ultra-processed foods, where the link between the products those companies sell and the health of the general population might not be as clear.
“But there is a lot more work we should be encouraging companies to do to understand that impact and to move along as they responsibly steward and transition to a net zero economy.”
She added that the health and protection insurance sector has a very clear and distinct role to play as we do get to that net zero society and “make sure that its a just transition”.
Health risk prevention
Recognising the negative impact of smoking on health, Deepak Jobanputra, chief sustainability officer, Vitality said the industry needed to move beyond purely providing financial resilience and move towards a health risk prevention model.
“There is a call to action here” Jobanputra said. While profitability is important, “we have to move beyond profit and think of social outcomes,” he said.
He said insurance companies need to think of all their stakeholders, and really needed to focus on health.
“That is really changing our role, changing our identity,” he said.
But are shareholders prepared to take a hit on profit by emphasising positive social outcomes?
While Jobanputra was unsure if shareholders would go that far, he thought that greater profits could be the result.
“I think shared value will create greater profits,” he said.
“Organisations that do not focus on environmental, social and governance (ESG) shared values and sustainablity will face a dramatic existential crisis in the future,” he warned.
“It may be a long way off. But I personally think that’s a reality,” he said.
Shareholders will benefit
Kabari Bhattacharya, EMEIA sustainable finance insurance leader at Ernst & Young LLP believed there was a great opportunity for shareholders with a new perspective.
“The quid pro quo of ESG or profitability doesn’t exist in that balance any longer,” she said.
“I would see it as an opportunity, rather than something that shareholders have to give up,” she said.
Meanwhile, increasing health awareness is “exactly like” the issue of climate change, Charfi said.
“A few years back our awareness about climate change was much lower,” she noted.
But the health industry could learn from how that issue was tackled, and now needed to raise awareness about the topic of health.
One of the dangers is that most customers are already in the “affluent class”, so the question now is how to reach customers outside of that group, Charfi said.
But there has been some success in raising awareness, as there have been a lot of achievements recently in identifying disease patterns and how individuals can act in a preventative way, she said.