Assessing the impact of ESG regulations on the insurance industry

By Bernard AKYIN-ARKOH

Environmental, Social, and Governance (ESG) considerations are increasingly redefining business practices across the globe. ESG regulation are increasingly influencing the insurance industry globally. ESG regulations are playing a growing role in shaping both underwriting and investment decisions.

As global and regional regulators advocate for more sustainable and responsible business models, insurers are being compelled to align their operations with principles of climate resilience, social accountability and ethical governance. These evolving standards are not only influencing how risks are assessed and priced but are also steering investment portfolios toward sustainable, impact-oriented assets.

This article delves into the foundations and evolution of ESG, highlighting its three core pillars and the emergence of ESG-specific regulatory frameworks. It further examines the ways in which ESG integration is transforming insurance practices particularly in underwriting, investment strategy and claims, while setting the direction for the future of the insurance industry across the globe.

What is ESG?

ESG does not have a single, universally accepted definition, but it is best understood as a framework that enables companies to identify and disclose non-financial factors related to their operations, focusing on environmental, social and governance aspects. It serves as a guide for sustainable development and ethical business practices, which are crucial for risk management, long-term profitability, and maintaining stakeholder confidence.

In Africa, ESG is now an integral part of development strategies. The African Union’s Agenda 2063 places ESG principles at the core of economic growth and sustainability, aligning with the United Nations’ Sustainable Development Goals (SDGs). Businesses across the continent, regardless of size, face increasing pressure from investors, regulators, and civil society to align their operations with ESG standards. This is particularly evident in industries such as mining, energy, and manufacturing, which have historically had significant environmental and social impacts.

The three pillars of ESG

ESG encompasses three core components, each playing a crucial role in shaping sustainable and responsible business practices. In the insurance industry, these pillars are becoming integral to underwriting, claims handling, investment decisions and overall corporate strategy. This section explores how each pillar connects to insurance operations.

1. Environmental – The environmental pillar focuses on how a company (the insurance industry) affects the natural world. This focuses on how insurance companies assess and respond to environmental risks and their own ecological impact. Issues such as climate change, extreme weather events, pollution and resource consumption have direct implications for underwriting, investment, claims and reinsurance. Insurers must evaluate how their clients manage environmental risks and also demonstrate their own environmental responsibility such as adopting green office practices, investing in sustainable assets, or offering coverage for renewable energy projects.
2. Social – The social pillar looks at how a company (insurance industry) treats people from its employees to customers and communities. This relates to how insurers engage with stakeholders, including employees, policyholders, agents and communities. Social considerations in insurance include promoting financial inclusion (e.g., microinsurance), ensuring fair claims practices, and upholding customer rights and privacy. Internally, insurers are expected to foster diversity, equity, workplace safety, and skills development. Socially responsible insurers also contribute to societal well-being through CSR initiatives and community partnerships.
3. Governance – The governance pillar deals with how a company is managed. It covers the behavior of executives and board members, how decisions are made and how transparent and ethical the company is. Good governance is critical for trust in the insurance sector. This pillar addresses issues like board composition, transparency, executive compensation, anti-corruption policies, and regulatory compliance. For insurers, strong governance ensures ethical underwriting practices, compliance with solvency requirements, fair customer treatment and sound risk management. Regulators increasingly assess governance structures when issuing licenses or approvals, making it a key area for sustainable business growth.

Environmental, Social and Governance (ESG) considerations are increasingly influencing business decisions globally. With climate change, social inequalities, and governance challenges impacting risk landscapes, regulators and insurers are integrating ESG principles into their investment and underwriting strategies. This article explores how ESG regulations are shaping insurance investments and underwriting in Africa, the challenges insurers face, and the opportunities ahead.

The evolution of ESG – From ethical origins to strategic imperative

The journey of Environmental, Social, and Governance (ESG) principles into the heart of global business strategy is one of transformation, adaptation, and rising accountability. Although ESG became widely recognized in the 21st century, its conceptual foundations stretch back decades rooted in the early movements of Corporate Social Responsibility (CSR) and ethical investing.

The first seeds of this evolution were sown in the 1950s when thought leaders began challenging businesses to consider their societal impact beyond profit-making. This vision gained traction during the civil rights and environmental activism movements of the 1960s and 1970s, which encouraged companies to play a role in promoting social equity and environmental stewardship. By the 1980s, corporate leaders started weaving social good into their strategies, signaling the early days of purpose-driven business models.

Parallel to these developments was the rise of ethical investing. In 1971, the Pax Fund was launched in the United States as the first ethical investment fund specifically avoiding companies involved in the Vietnam War. This initiative was a direct response to growing public scrutiny over how investment capital was being deployed. It was followed in 1984 by the creation of the UK’s first ethical unit trust by Friends Provident, marking a European expansion of values-based investing.

The concept of sustainable development began to enter the global discourse in 1987, when the United Nations’ Brundtland Commission released its influential report titled Our Common Future. The report popularized the idea of balancing environmental protection, social progress, and economic growth principles that today form the bedrock of ESG thinking.

However, it wasn’t until 2004 that the term “ESG” was formally coined in the landmark Who Cares Wins report, published by the UN Global Compact. This report urged investors and business leaders to integrate environmental, social, and governance factors into long-term decision-making, stressing that ESG performance was directly linked to financial sustainability. It addressed all key players—corporate managers, investors, analysts, and policymakers—establishing ESG as a mainstream topic for the first time.

The momentum continued in 2006 with the launch of the UN-supported Principles for Responsible Investment (PRI), a global framework guiding investors to embed ESG into their strategies and ownership practices. Around the same time, industry-specific standards such as LEED, BREEAM, and ENERGY STAR began influencing sectors like real estate and construction. These certifications highlighted that environmentally responsible practices were not just moral—they were good business. The broader ESG landscape was further reinforced by developments in corporate governance. In the UK, the Companies Act of 2006 provided a legal framework that underscored directors’ responsibilities not just to shareholders but to other stakeholders, advancing the “G” in ESG.

As the 21st century progressed, ESG evolved into a measurable and strategic framework. The emergence of ESG metrics enabled businesses and investors to assess corporate impact with greater precision. Sustainability reporting, once a voluntary CSR exercise, became an expected norm. Global efforts such as the Paris Agreement and the UN Sustainable Development Goals (SDGs) added urgency to ESG integration. Governments passed laws targeting carbon emissions, social discrimination, and corporate ethics. Investors began demanding greater transparency and accountability on ESG performance, aligning financial returns with sustainable outcomes.

The social and environmental turbulence of the 2020s including the COVID-19 pandemic and global racial justice movements further intensified ESG’s relevance. These crises spotlighted systemic vulnerabilities and forced companies to prioritize worker safety, supply chain resilience, and social equity. ESG became less about compliance or reputation, and more about resilience, stakeholder trust, and long-term value creation.

Today, we are witnessing a paradigm shift where ESG is not just a reporting obligation but a business imperative. It’s embedded into core strategy, influencing innovation, investment, and operational decisions. Corporate boards are expected to demonstrate leadership on sustainability, diversity, and ethical conduct. Regulators worldwide are mandating ESG disclosures, and consumers are rewarding businesses that align with their values.

From the first calls for social responsibility in the 1950s to the strategic ESG integration of today, the evolution has been shaped by changing societal expectations, environmental urgencies, and global movements. It is now widely recognized that businesses are more than engines of profit they are also stewards of people and the planet. And as ESG continues to evolve, it represents not just a framework for risk management, but a roadmap for building a more resilient, inclusive, and sustainable future.

Why ESG is important to the insurance industry

Environmental, Social and Governance (ESG) principles are no longer peripheral considerations, they are now essential components of sustainable success in the insurance sector. As insurers face growing scrutiny from regulators, investors, and the public, integrating ESG into strategy and operations enhances competitiveness, risk management, and long-term resilience.

1. Boosting brand reputation and trust

A robust ESG framework strengthens an insurer’s reputation and fosters trust among policyholders, investors, regulators, and partners. Companies that demonstrate commitment to environmental stewardship, social impact, and ethical governance are more likely to attract and retain clients who value responsibility. In a trust-based industry like insurance, this reputational strength is critical for brand loyalty and market positioning.

2. Enhancing risk assessment and mitigation

Insurance companies thrive on risk evaluation. ESG integration allows insurers to better understand and price emerging risks such as climate-related disasters, social unrest, or regulatory non-compliance. By embedding ESG factors into underwriting and portfolio management, insurers can proactively manage exposures and avoid costly losses, thereby enhancing overall risk resilience.

3. Enabling product innovation and strategic growth

ESG opens new avenues for innovative insurance products and services. From climate risk coverage and renewable energy project insurance to microinsurance for underserved populations, ESG-aligned products allow insurers to tap into emerging markets and meet evolving societal needs while also aligning profitability with purpose.

4. Fostering a responsible organizational culture

Internally, ESG helps cultivate a purpose-driven culture that prioritizes ethical behavior, diversity, and sustainability. Insurers with inclusive hiring practices, strong governance, and environmental initiatives attract and retain top talent. This cultural strength leads to better employee satisfaction, productivity, and long-term institutional value.

5. Attracting ESG-conscious investors and partners

Insurers that demonstrate ESG leadership are better positioned to secure capital from investors who prioritize sustainability and ethical governance. Transparent ESG reporting also appeals to partners and reinsurers looking to align with responsible and forward-thinking entities, ultimately boosting business opportunities.

6. Improving operational efficiency and resilience

Investments in ESG often result in streamlined operations. Whether through digital transformation, energy efficiency in offices, or community-based claims management, ESG practices enhance agility, reduce costs, and improve the insurer’s ability to respond effectively to crises—be it climate events or socio-economic shocks.

7. Unlocking inclusive markets and impact opportunities

Through ESG, insurers can identify unmet protection needs in vulnerable communities such as smallholder farmers, informal workers, or climate-sensitive regions. By offering tailored solutions, insurers not only drive financial inclusion but also diversify their portfolios and contribute to societal resilience, aligning growth with impact.

The rise of ESG regulations in the insurance industry

As key risk managers within the broader economy, insurance companies are increasingly expected to drive positive change. Through innovative product development, insurers can distinguish themselves by promoting sustainable outcomes whether by assisting policyholders in proactively managing risks or by offering solutions that replace insured assets with environmentally friendly alternatives.

For instance, insurers can encourage the adoption of green vehicles or the use of sustainable building materials. Long-term insurance products must also align with investor concerns regarding carbon-intensive assets and broader sustainability goals. To keep pace with evolving expectations from customers, regulators, and the public, insurance company boards must act decisively and swiftly.

Across the globe, regulatory frameworks are shifting ESG (Environmental, Social, and Governance) considerations from voluntary commitments to compliance requirements. In the UK, domestic policy initiatives have elevated ESG from a matter of corporate responsibility to a regulatory priority.

Similarly, in Africa, regulatory bodies are beginning to integrate ESG principles into governance frameworks, recognizing climate risk as a financial risk. Just as the Prudential Regulation Authority (PRA) in the UK mandates insurers to incorporate climate risk into their governance structures, apply long-term scenario analyses, and disclose financial vulnerabilities, Global regulators are increasingly adopting ESG frameworks, and insurers worldwide must proactively integrate sustainability considerations into their operations to stay compliant, competitive, and resilient in an ever-evolving market landscape.

Despite these challenges, the trend toward ESG-driven underwriting is expected to continue, particularly as regulatory bodies worldwide impose stricter sustainability requirements. For instance, the European Union’s Sustainable Finance Disclosure Regulation (SFDR) and the Task Force on Climate-related Financial Disclosures (TCFD) are pushing insurers toward greater transparency in ESG-related risk management (European Commission, 2023).

Global examples of ESG compliance in the insurance industry

Around the world, several countries have taken significant steps to mainstream ESG compliance within their insurance and financial sectors. These case studies illustrate how regulatory frameworks and industry practices are evolving to embed sustainability into risk assessment, governance, and investment decisions.

1. United Kingdom – In the United Kingdom, ESG compliance is backed by strong legislative and supervisory mechanisms. The Companies Act 2006, updated to require directors to consider broader stakeholder interests and sustainability concerns, laid the groundwork for ESG integration (UK Government, 2006). Moreover, the Prudential Regulation Authority (PRA) mandates climate-related stress testing and the inclusion of environmental risks in insurers’ Own Risk and Solvency Assessments (ORSA). The UK was also among the first to make Task Force on Climate-related Financial Disclosures (TCFD) reporting mandatory for listed companies and asset managers (PRA, 2019; BEIS, 2021).
2. France – France became the first country to mandate ESG and climate risk disclosures through Article 173 of its Energy Transition Law (2015). This legislation requires insurers and institutional investors to disclose how ESG factors are integrated into investment strategies and how portfolios align with national climate goals (French Government, 2015). As a result, French insurers have strengthened their reporting, increased their investments in renewable energy and low-carbon assets, and established themselves as global ESG frontrunners.
3. Singapore – Singapore has emerged as a leading financial hub in sustainable finance. The Monetary Authority of Singapore (MAS) published Environmental Risk Management Guidelines in 2020 for insurers, asset managers, and banks. These guidelines require firms to assess, monitor, and disclose environmental risks, and integrate ESG factors into governance and strategy (MAS, 2020). In addition, MAS provides green finance incentives, such as sustainability-linked product development grants, reinforcing Singapore’s status as a regional ESG pioneer.
4. Ghana – Ghana is taking a proactive stance in aligning with global ESG standards through the National Insurance Commission’s issuance of comprehensive ESG Guidelines for the insurance industry. Introduced in December 2024, these guidelines mandate insurers and reinsurers to integrate environmental stewardship, social responsibility, and strong governance practices into their underwriting, investments, and overall operations. By embedding ESG into risk management, governance frameworks, and disclosure practices, Ghana positions itself as a regional leader in sustainable insurance regulation—demonstrating its commitment to responsible investing, climate resilience, and inclusive financial systems in Africa.
5. South Africa – South Africa stands out as a continental leader in ESG integration. Through Regulation 28 of the Pension Funds Act, institutional investors are required to consider environmental, social, and governance factors in their investment decisions (Republic of South Africa, 2011). In the insurance space, the Financial Sector Conduct Authority (FSCA) and the Prudential Authority have guided insurers to embed ESG risks into capital adequacy frameworks, enterprise risk management, and disclosure practices (FSCA, 2021). These initiatives have resulted in stronger climate-related disclosures, more sustainable underwriting practices, and increased issuance of green insurance products.
6. Kenya – Kenya has made significant progress by embedding ESG into financial regulation through the collaboration of the Capital Markets Authority (CMA) and the Insurance Regulatory Authority (IRA). The CMA’s ESG Disclosure Guidelines (2021) and the IRA’s Strategic Plan 2021–2025 support ESG integration and promote sustainable financial practices. Kenyan insurers are now encouraged to assess ESG-related risks, invest responsibly, and develop inclusive products such as agricultural and microinsurance that enhance social resilience (IRA Kenya, 2022).
7. United State of America – The United States has emerged as one of the world’s largest ESG investment markets, with over $400 billion in ESG-focused funds as of 2023 (Morningstar, 2023). While ESG regulation is not yet uniformly mandated at the federal level, the U.S. actively engages with ESG principles through a combination of investor-driven momentum, corporate initiatives, and evolving regulatory efforts. The Securities and Exchange Commission (SEC) has proposed mandatory climate-related disclosure rules for public companies, aligning with global frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD). Additionally, the National Association of Insurance Commissioners (NAIC) encourages U.S. insurers to assess and disclose climate risks. However, ESG remains politically polarized, with states like California advancing ESG disclosure mandates, while others, such as Texas and Florida, have introduced laws limiting ESG integration in public investments. Despite this divide, voluntary adoption of frameworks like GRI, SASB, and IFRS S1/S2 by major corporations—including insurers—demonstrates a clear market shift toward sustainable governance and investment practices.

Together, these examples reflect a global trend: ESG compliance is transitioning from voluntary best practice to regulatory expectation. As regulators set new standards, insurers must evolve their risk and investment strategies to ensure long-term sustainability, social impact, and regulatory compliance.

Impact of ESG regulations on insurance underwriting strategies

Environmental, Social, and Governance (ESG) considerations are reshaping the landscape of insurance underwriting, particularly in response to the growing emphasis on climate protection. As insurers fundamentally operate by assessing and managing risks, the integration of ESG principles has become a key factor in underwriting policies, influencing decisions on which risks to cover, how to price them, and the long-term sustainability of insured activities.

A central focus of ESG-driven underwriting is environmental sustainability, particularly in mitigating climate-related risks. The Insure Our Future movement, formerly known as the Unfriend Coal campaign, is a prime example of this shift. Insure Our Future is an international coalition of NGO’s and social movements calling on insurance companies to exit the coal sector and phase out oil and gas in line with a pathway limiting global heating to 1.5°C.

The goal of the Insure Our Future campaign is to make coal and other fossil fuels uninsurable. Without insurance, few new coal mines, oil pipelines and thermal power plants can be built and existing projects have to be phased out. We hold insurers accountable for enabling further fossil fuel projects, and expose corporate climate champions and villains to their customers and the broader public.

The movement aims to restrict the financial safety net that insurance provides to such businesses, effectively making it more difficult for them to operate. This approach has already had a significant impact, as several major insurers, including AXA, Allianz, and Swiss Re, have committed to phasing out coverage for coal-related activities (Insurance Business, 2023).

The exclusion of fossil fuel industries from underwriting portfolios is particularly significant in jurisdictions where obtaining insurance is a legal prerequisite for business operations. Without adequate insurance, many fossil fuel projects may struggle to secure funding or comply with regulatory requirements, accelerating the transition to cleaner energy sources.

For non-life insurers, the integration of ESG principles into underwriting is increasingly driven by the rising financial and operational risks posed by climate change. The frequency and severity of natural disasters including hurricanes, floods, droughts and wildfires have escalated sharply in recent years, resulting in significant and recurring losses for the insurance industry.

According to Swiss Re (2023), global insured losses from natural catastrophes surpassed $100 billion for the third consecutive year, underscoring the growing urgency for insurers to embed climate risk into their underwriting processes. This trend is forcing non-life insurers to reassess their exposure to high-risk regions and perils, recalibrate pricing models and adopt more stringent risk selection criteria.

Additionally, insurers are instituting stricter policy terms, exclusions, and conditions such as higher deductibles or coverage caps for climate-sensitive risks to ensure long-term portfolio sustainability. Some are also incorporating forward-looking climate data and stress-testing tools to evaluate how future climate scenarios may impact underwriting profitability and solvency.

On the other hand, life insurers face a different set of ESG-related underwriting challenges. While they are less exposed to property damage caused by environmental events, climate change and social issues still influence life and health risk assumptions. Increasing heatwaves, poor air quality, water scarcity and the spread of climate-sensitive diseases (like malaria or dengue) can affect mortality and morbidity rates, particularly in vulnerable populations and regions.

Life insurers are beginning to respond by refining their underwriting frameworks to include ESG risk factors, especially when pricing long-term products like whole life or annuities. They are also using ESG insights to design inclusive insurance solutions for underserved populations, aligning with Sustainable Development Goals (SDGs) and social impact objectives. For instance, some are adjusting underwriting guidelines to avoid indirect discrimination, while others are using wearable tech and real-time data to promote healthier living thereby reducing long-term claims.

Furthermore, governance-related considerations such as ethical marketing, data privacy, and transparency in contract terms are becoming central to both life and non-life underwriting. Regulators and stakeholders increasingly expect insurers to uphold high governance standards, not only in investment and corporate governance, but also in how they treat customers during the underwriting process.

In summary, ESG factors are significantly reshaping underwriting practices in both non-life and life insurance sectors. Non-life insurers are being compelled to adopt more climate-resilient underwriting strategies, while life insurers are evolving their models to address health, social equity and long-term demographic shifts. Across both sectors, ESG integration is emerging as a vital component of sustainable risk assessment and portfolio management.

Impact of ESG regulations on insurance investment strategies

The integration of Environmental, Social and Governance (ESG) factors into insurance investment strategies has become a critical focus for insurers globally. Contrary to initial concerns about potential trade-offs, global studies suggest that ESG-aligned portfolios generally have a positive or neutral impact on long-term investment returns. Regulatory compliance has proven to enhance overall risk management by requiring robust assessments of systemic threats like climate change, reputational damage and governance failures.

A growing body of evidence shows that ESG portfolios either outperform or match the performance of traditional investments in terms of risk-adjusted returns. This shift in perspective has been largely driven by the increasing influence of ESG regulations on how insurers manage their investment portfolios.

Regulatory frameworks such as the EU Sustainable Finance Disclosure Regulation (SFDR), the IFRS Sustainability Disclosure Standards (S1 & S2) and Ghana’s 2024 ESG Guidelines for the Insurance Industry are compelling insurers to embed ESG considerations into their asset management practices.

These directives mandate that insurers assess and disclose environmental, social, and governance risks as part of their investment decision-making. As a result, insurers are increasingly shifting capital away from high-risk sectors—such as fossil fuels, tobacco, and companies with poor governance—toward ESG-aligned investments, including green bonds, renewable energy projects, sustainable infrastructure, and social impact funds.

In Ghana, the National Insurance Commission (NIC) has taken a proactive stance by mandating ESG integration into insurers’ investment strategies. This includes conducting materiality assessments, monitoring ESG exposures, and ensuring transparency in disclosures. This initiative encourages Ghanaian insurers to move beyond traditional return metrics and also consider the broader impact of their investment decisions on the environment, society, and corporate ethics.

While the strategic alignment with ESG delivers several long-term benefits, the impact on investment strategy varies significantly across insurance business lines. Non-life (property and casualty) insurers are particularly exposed to environmental risks through their underwriting portfolios, as climate-related disasters such as floods, hurricanes and wildfires directly influence claim volumes and pricing models.

However, when it comes to investments, non-life insurers typically focus on short-term, liquid assets to match the shorter duration of their liabilities. This means that their investment strategies are often decoupled from their underwriting risks, making the integration of ESG factors into investment decisions less direct. As a result, many non-life insurers adopt a cautious approach to ESG investing, often relying on basic exclusions (e.g., avoiding fossil fuels or weapons) or low-risk ESG screening. They tend to favor ESG options only when the perceived trade-off with financial returns is minimal, maintaining a strong preference for liquidity and credit quality.

In contrast, life insurance companies are naturally more aligned with ESG investment principles due to their longer liability horizons and stable cash flow profiles. Life insurers manage portfolios that include long-term fixed income instruments, infrastructure investments, real estate and private equity—all of which offer significant opportunities for ESG integration.

ESG regulations are therefore having a more profound impact on life insurers, encouraging them to reassess their portfolio exposures, reduce climate-related investment risks, and allocate more capital toward sustainable assets. With longer time horizons, life insurers are better positioned to capture the long-term financial and reputational benefits of ESG investing, including lower volatility, reduced exposure to stranded assets, and improved stakeholder confidence.

Furthermore, life insurers are increasingly expected by regulators and policyholders to demonstrate responsible stewardship of assets. ESG frameworks like the Principles for Responsible Investment (PRI) and IFRS Sustainability Disclosure Standards (S1 & S2) require life insurers to assess material ESG risks, conduct scenario analyses, and disclose the sustainability performance of their portfolios. In response, many life insurers are shifting their investment strategy to include green bonds, climate-aligned infrastructure, healthcare, affordable housing and other assets that support Sustainable Development Goals (SDGs).

Investors, including insurers, are generally willing to accept only a slight reduction in returns in exchange for ESG compliance. This tension between profitability and sustainability is a recurring theme. Many insurers adopt ESG frameworks such as the Principles for Responsible Investment (PRI) and the Principles for Sustainable Insurance (PSI), which support climate and sustainability goals. However, ESG is still often viewed as a potential constraint on profitability rather than a vehicle for long-term business growth.

In conclusion, ESG regulation is undeniably influencing insurance investment strategies by improving transparency, risk management, and alignment with stakeholder values. Yet, the industry continues to grapple with balancing sustainability objectives with return expectations. Forward-thinking insurers who integrate ESG early stand to gain regulatory goodwill, reputational benefits, and more resilient investment portfolios in a rapidly changing world.

Impact of ESG regulations on insurance claims

The integration of ESG principles is having a significant and evolving impact on claims payment practices within the insurance industry both positively and in some cases, challengingly. On the positive side, ESG-driven expectations for fairness, transparency, and customer responsiveness are encouraging insurers to streamline claims processes, reduce turnaround times and adopt inclusive and technology-enabled systems particularly for underserved or vulnerable populations.

For example, mobile-based claims reporting and digital settlement platforms have enhanced accessibility and speed in microinsurance and agricultural schemes across Africa. Additionally, environmental considerations have led to the promotion of sustainable claims solutions, such as eco-friendly repairs and green replacements, which align insurance payouts with climate resilience goals.

However, ESG integration can also introduce complexities. Insurers must navigate increasing regulatory scrutiny, climate data uncertainty and rising costs from environmental claims particularly as climate-related catastrophes become more frequent and severe. Inadequate ESG governance may also result in delayed payments, reputational risks or litigation, especially if customers perceive discrimination, opacity, or unfair handling. Overall, ESG is transforming claims payment into a more accountable and stakeholder-focused process, but it requires strategic investment and governance discipline to avoid unintended delays or inefficiencies.

Conclusion

ESG principles are becoming essential to the future of the insurance industry, influencing both underwriting and investment strategies. As regulations evolve, insurers must adapt by embedding sustainability, ethical governance, and social responsibility into their operations. This shift presents challenges but also offers significant benefits—better risk management, improved reputation, and long-term financial resilience. For insurers in Africa and globally, proactive ESG integration will be crucial for sustainable growth and industry leadership.

>>>the writer is a Chartered Insurance Practitioner (ACII-UK), Chartered Property Casualty Underwriter (CPCU) and an Associate in Risk Management (ARM). He is an award-winning author with four inspiring published books. Bernard was honored as the 2nd runner-up for the 2024 AIO-YIPs African Next Generation Award and received the Young Achiever Award at the 2024 Ghana Insurance Awards. He holds an Executive MBA in Finance from the University of Ghana, Legon, and is currently works with Star Assurance Limited. In addition to his professional roles, Bernard is a resource person for the Ghana Insurance College (GIC) and a member of the Professional Education and Research Committee of the Chartered Insurance Institute of Ghana (CIIG). He can be reached via 233249236939 and or [email protected]

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