HSBC plans to integrate sustainability into its insurance business, launching green’ insurance products across its global operations this year.
Sunny Sehgal has been appointed as the bank’s first senior manager for sustainable insurance. He was formerly head of environmental risks in the bank’s insurance brokerage business. Based in HSBC’s London headquarters, Sehgal will co-ordinate global strategy for sustainability in the group’s insurance businesses and examine how climate and sustainability risks impact the bank.
Most of the insurance industry is just starting to address risks associated with climate change and other sustainability issues, even though it is in the front line when it comes to the financial impacts of climate change Sehgal said.
The bank has already launched of a number of green insurance products, including consumer insurance products in Latin America which put a slice of the premium towards environmental causes. HSBC plans to embed sustainability into insurance products in all the regions where it operates.
Such products could include green re-instatement’ buildings insurance where, in the event of a covered loss, the insurer pays for a greener replacement.
This approach has been pioneered to a limited extent by insurers in the US such as the Fireman’s Fund, a subsidiary of Allianz, which offers green upgrade coverage’ for commercial buildings, covering rebuilding and replacement with specific non-toxic paint and installation of insulation. In the event that a building is destroyed, the insurance covers rebuilding to certified green standards.
HSBC is participating in the development of the UN Principles for Sustainable Insurance, meant to guide insurers in the same way as the UN’s Principles for Responsible Investment (PRI). Investors signed up to the voluntary UN PRI had around $18 trillion in assets under management in January 2009.