Mercer is bringing health and protection insurers together for a second session with the aim of improving clarity and reporting of environmental, social and governance (ESG) credentials in the sector.
Last year the consultancy held its first session to start the conversation with health and protection insurers on the importance of ESG issues and how the sector could relay what it was doing, with the view to potentially developing such a standard or framework.
Mercer further addressed the topic at Health & Protection’s second annual Health Summit, explaining how it hoped the industry could relate better to customer needs in the area and engage a wider range of advisers in the process.
Marcia Reid, non-executive director at Sherwood Healthcare, asked if there was some merit, bearing in mind there is so much information to go through, in creating an ESG industry standard that would be easier for clients to navigate
In response Nick McMenemy, partner and digital strategy and markets leader and London office leader at Mercer Marsh Benefits (pictured), explained that believing an industry standard for ESG reporting across the insurance sector could be developed was the starting point for the first meeting of insurance leaders last year.
“It all stemmed from internally we were reviewing the criteria that our consultants use when they are placing business,” McMenemy explained.
“We can look at service, price, proposition and number of hospitals, or how many seconds it takes for the phone to be answered, but we couldn’t assess any of the ESG credentials in any kind of consistent or objective way,” he said.
“That’s ultimately where we would like to get to which is why, you could say we’re giving up a bit of competitive advantage by sharing this with the room. But we’re trying to get to a place where if together we can come up with an industry standard, then that would be an amazing place to get to.”
Common framework a ‘great starting point’
However, Mark Waters, principal at Mercer and market development leader Mercer Marsh Benefits, explained the aim of the exercise was not to say one provider is better than another.
“It goes back to that very basic questions of what are the client’s priorities? Where are their focus areas and how do we connect those better with whatever a provider might do?” he said.
“I know in other markets there are ratings on ESG credentials and so on. Is that a place we want to get to? I don’t know – starting with a common framework sounds like a great starting point and go from there.”
And McMenemy noted the next step of the process will be this week’s follow-up session.
“So we’ve got everyone back in the room to try and demonstrate progress, to take the conversation onto the next step and come up with a common framework that we might use to make consistent and objective placement decisions.”