By Favour Nnabugwu
AM Best has become a signatory of the United Nations Environment Programme’s (UNEP) FI Principles for Sustainable Insurance (PSI) being the first Credit Rating Agencies, CRA to be.
AM Best believes the insurance industry plays an important role in supporting sustainable economic and social development.
In addition, management of environmental, social and governance (ESG) efforts will strengthen the insurance industry’s contribution to building a resilient, inclusive and sustainable society. AM Best’s PSI membership is a significant step in this direction.
Endorsed by the U.N. Secretary-General, the Principles have led to the largest collaborative initiative between the U.N. and the insurance industry — the PSI Initiative. Over 140 organizations worldwide have adopted the four Principles for Sustainable Insurance, including insurers representing more than 25percent of world insurance premium volume and USD 14 trillion in assets under management.
The Principles are part of the insurance industry criteria of the Dow Jones Sustainability Indices and FTSE4Good.
“AM Best and its major affiliates are pleased to become a signatory to the U.N.’s Principles for Sustainable Insurance. The Principles ‘serve as a global framework for the insurance industry to address environmental, social and governance risk and opportunities,’” said Arthur Snyder III, Chairman, President & CEO of AM Best Company.
“This fits both our focus on insurance and our continued perspective that ESG elements play an important role in the financial strength of an insurance company.
We’ve long captured environmental and governance issues in our ratings opinions through catastrophe stress tests, A&E tests and ERM. ESG is a repackaging of these. Through the PSI, we are making a further commitment of disclosure and transparency to forward an ESG agenda,” said Matthew C. Mosher, President & CEO of AM Best Rating Services.
“We are delighted that the world’s first credit rating agency is also the first credit rating agency to sign the UN’s Principles for Sustainable Insurance (PSI),” said Butch Bacani, who leads the PSI at the UN Environment Programme.
“As the largest credit rating agency specializing in the insurance industry, this is a clear and strong signal from AM Best that sustainability matters in the insurance business, that sustainability counts. In the final analysis, the bottom line is sustainability.”