Paige Cerulli Last Updated On: May 13, 2024

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What Are Insurance Trends for a Sustainable Future

The importance – and awareness – of sustainability is at an all-time high. With the effects of climate change all too easy to see, consumers are increasingly valuing and seeking out sustainable products and services.

That increased focus on sustainability is reflected in many industries, including the insurance industry. Sustainable insurance trends are on the rise. You might just add sustainability to your list of must-have qualities when you’re shopping for an insurance company.

Insurance Trends for a Sustainable Future

The United Nations’ Principles for Sustainable Insurance

In 2012, the UN released four Principles for Sustainable Insurance. The Principles help the insurance industry to better understand, prevent, and reduce risks, including environmental risks, and to support a sustainable society.

The four Principles read:

  1. We will embed in our decision-making environmental, social, and governance issues relevant to our insurance business.
  2. We will work together with our clients and business partners to raise awareness of environmental, social, and governance issues, manage risk, and develop solutions.
  3. We will work together with governments, regulators, and other key stakeholders to promote widespread action across society on environmental, social, and governance issues.
  4. We will demonstrate accountability and transparency in regularly disclosing publicly our progress in implementing the Principles.

What Is Sustainable Insurance?

The Principles guide insurance companies in establishing sustainable insurance, but as every company can adopt the Principles in its own way, sustainable insurance may take on many forms.

Customer Discounts for Sustainable Practices

Sustainable insurers might offer policyholders discounts for going green and adopting sustainable practices. They could include discounts for insuring electric or hybrid cars, discounts for green home improvements like installing energy-efficient windows, and incentives for customers whose buildings are Leadership in Energy and Environmental Design (LEED) certified.

Climate Resilience Support for Customers

Insurance companies can also support customers with discounts or incentives to make their homes more resilient to climate change and the resulting weather impacts, like wildfires and tropical storms. By incentivizing customers to invest in home protection practices like hardening their homes against wildfires, insurance companies can help to reduce the number and cost of claims. They can protect already built homes and reduce the consumption of building materials required to repair or rebuild damaged homes.

Specialized Policies for Sustainable Property

As sustainability awareness grows and consumers increasingly purchase vehicles and homes made with sustainable products, insurance companies can support these customers by developing insurance policies designed specifically for them. For instance, autonomous vehicles are likely to be a key component of sustainable transportation, but traditional car insurance models don’t yet work for fully autonomous vehicles, especially regarding who would be at fault in the event of an autonomous vehicle accident.

Insurance companies that develop specific policies for electric vehicles, autonomous cars, and homes and businesses built with sustainable designs and products can support this eco-friendly movement.

Advocacy for Sustainability

A final key element of sustainable insurance comes in the form of advocacy for sustainability. Insurance companies are powerful and have access to a tremendous amount of data. They can use their positioning and capabilities to host educational initiatives to help communities adopt more sustainable practices. They can also sponsor community service initiatives with a sustainability focus, such as helping to plant trees or support recycling.

Choosing Sustainable Insurance

As you shop for insurance, consider whether you’re choosing a company that promotes sustainability. If you have an electric car or eco-friendly features in your home, a sustainable insurance company might offer discounts and other incentives to help keep your costs down. Plus, you’ll have the satisfaction of supporting a company that promotes the causes you believe in.

Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.

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