Skip to main content
SpringerLink
Log in

Sustainable Insurance Assessment: Towards an Integrative Model

  • Published:
The Geneva Papers on Risk and Insurance - Issues and Practice Aims and scope Submit manuscript

Abstract

This paper investigates the corporate social responsibility of insurance companies. The assessment procedures available today do not use environmental, social and governance (ESG) risk variables. We propose an integrative model to understand how progress in ESG risk underwriting can influence the management of ESG issues in insurance operations. This model was developed and tested by conducting a survey of 98 insurance professionals in Brazil. The model indicates only environmental and governance constructs as measurement discriminants. We have found a positive relationship between company size and progress in ESG risk underwriting and ESG issues in insurance operation management constructs. Additional analysis of the gap between ESG risk materiality and product offer provides a road map for harnessing local opportunities.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Figure 1

Source: author

Figure 2

Source: Author (AMOS)

Similar content being viewed by others

Notes

  1. IUCN (1980).

  2. Pezzey (1997).

  3. Van der Vorst et al. (1999); Giddings et al. (2002).

  4. Daly (1990); Lélé (1991); Mebratu (1998); Reddy and Thomson (2015).

  5. Van Marrewijw (2003); Waddock (2004).

  6. Obalola (2008).

  7. Montiel (2008).

  8. Metcalf and Benn (2013).

  9. Scholtens (2011).

  10. Godfrey et al. (2009).

  11. Crane et al. (2008); Aguinis and Glavas (2012).

  12. Marom (2006); Husted et al. (2015).

  13. Porter and Kramer (2006); Busco et al. (2007).

  14. Baumgartner and Ebner (2010).

  15. Scott (2003).

  16. Arena (2008).

  17. Maslakovic (2013).

  18. Staib and Puttaiah (2014).

  19. Orie (2012).

  20. Scordis et al. (2014).

  21. Geneva Association; Climatewise (2012); SwissRe (2016).

  22. Arun et al. (2012).

  23. UNEP FI (2009).

  24. UNEP FI (2012).

  25. Scordis et al. (2014), p. 267.

  26. Callado and Fensterseifer (2011).

  27. Lapinskaite and Radikaite (2015).

  28. Olowokudejo and Aduloju (2011).

  29. Scholtens (2011).

  30. An exclusive Brazilian product, similar to a fixed-rate investment associated with a lottery prize.

  31. CNseg (2016).

  32. Karlsson et al. (2007).

  33. Tirole (2001).

  34. Epstein and Widener (2010).

  35. Johnson (1971).

  36. Freeman (1984).

  37. Elkington (1998).

  38. Lele (1991); Jacob (1994).

  39. Epstein and Roy (2003); Lemme and Wajnberg (2009); Shalchian et al. (2015).

  40. Vose (2008).

  41. Hoon Oh et al. (2013).

  42. UNEP FI (2012), pp. 4–5.

  43. Shea and Hutchin (2013).

  44. Lemme and Wajnberg (2009).

  45. CNseg and Consulting (2012a).

  46. CNseg and BSD Consulting (2012b).

  47. For more information on this project: http://www.portoseguro.com.br/servicos/renova-ecopecas/sobre-o-produto. Accessed in 10/11/2016.

  48. Scholtens (2011, p. 155).

  49. Monteiro and Galiza (2016).

  50. Babbie (2001).

  51. Bagozzi et al. (1991; Chimenti et al. (2014).

  52. Jöreskog and Sörbom (1989); Byrne (2001).

  53. The Likert scale is a technique for assessing attitudes (Likert, 1932).

  54. Aaker et al. (1995).

  55. Hair et al. (2009).

  56. Churchill (1979).

  57. Bagozzi et al. (1991); DeVellis (1991); Garver and Mentzer (1999).

  58. Kline (1998); Byrne (2001).

  59. UNEP FI (2009); Scholtens (2011); Scordis et al. (2014).

  60. Malhotra (2012).

  61. Hair et al. (1998).

  62. UNEP FI (2004); UNEP FI (2009); Cunha (2013); PRI (2015).

  63. UNEP FI (2009); Hoon Oh et al. (2013; CNseg (2016).

  64. Product group definition follows SUSEP’s (2012) guidelines.

  65. SUSEP’s (2014).

  66. Morosini (2016).

  67. Developed countries have three ESG risks with the same minimum score; we have highlighted the one with the lowest mean.

  68. Geneva Association, Lloyd’s (2014).

  69. Byrne (2001).

  70. Kline (1998); Byrne (2001); Chimenti et al. (2014).

  71. UNEP FI (2004); UNEP FI (2009); Cunha (2013); PRI (2015).

  72. Bagozzi et al. (1991); DeVellis (1991); Garver and Mentzer (1999).

  73. Porter and Kramer (2006); Busco et al. (2007).

  74. UNEP FI (2015).

  75. Margulis et al. (2011).

  76. Bautzer and Alves (2015).

  77. Nogueira and Blount (2016).

  78. Shea and Hutchin (2013).

References

  • Aaker, D., Kumar, V. and Day, G.S. (1995) Marketing Research, New York, NY: John Wiley and Sons, Inc.

    Google Scholar 

  • Aguinis, H. and Glavas, A. (2012) ‘What we know and don’t know about corporate social responsibility: A review and research agenda’, Journal of Management 38(4): 932–968.

    Google Scholar 

  • Arena, M. (2008) ‘Does insurance market activity promote economic growth? A cross-country study for industrialized and developing countries’, The Journal of Risk and Insurance 75(4): 921–946.

    Google Scholar 

  • Arun, T., Bending, M. and Arun, S. (2012) ‘Bequest motives and determinants of micro life insurance in Sri Lanka’, World Development 40(8):1700–1711.

    Google Scholar 

  • Babbie, E. (2001) The Practice of Social Research, Belmont, CA: Wadsworth Cengage Learning.

    Google Scholar 

  • Bagozzi, R., Yi, Y. and Philips, L. (1991) ‘Assessing construct validity in organizational research’, Administrative Science Quarterly 36(3): 421–458.

    Google Scholar 

  • Baumgartner, R. and Ebner, D. (2010) ‘Corporate sustainability strategies: sustainability profiles and maturity levels’, Sustainable Development 18(2): 76–89.

    Google Scholar 

  • Bautzer, T. and Alves, A. (2015) Insurers face $600 million claim in Brazil dam burst, sources say, Reuters, from http://www.reuters.com/article/us-brazil-damburst-insurance-idUSKCN0SZ2Z120151110, accessed 30 November 2016.

  • Busco, C., Quattrone, P. and Riccaboni, A. (2007) Management accounting: Issues in interpreting its nature and change, Management Accounting Research 18(2): 125–149.

    Google Scholar 

  • Byrne, B. (1998) Structural Equation Modeling with LISREL, PRELIS, and SIMPLIS: Basic Concept, Applications, and Programming, Mahwah, NJ: L. Erlbaum Associates.

    Google Scholar 

  • Byrne, B. (2001) Structural Equation Modeling with AMOS: Basic Concept, Applications, and Programming, Mahwah, NJ: L. Erlbaum Associates.

    Google Scholar 

  • Callado, A. and Fensterseifer, J. (2011) ‘Corporate sustainability measurement from an integrated perspective’, The Corporate Sustainability Grid (CSG), IJBIT 3(3):44–53.

    Google Scholar 

  • Chimenti, P.C. (2010) Broadcast TV in Brazil and New Media Challenge, s.l.: s.n.

  • Chimenti, P., Nogueira, R., Mazzon, J., Rodrigues, M. and Hupsel, L. (2014) ‘Electronic media use: Towards an integrative model’, Journal of Global Information Management 22(1): 51–69.

    Google Scholar 

  • Churchill, G. (1979) ‘A paradigm for developing measures of marketing constructs’, Journal of Marketing Research 16(1): 64–73.

    Google Scholar 

  • Climatewise (2012) Managing liabilities of European carbon capture and storage [pdf], from file:///C:/Users/Flavio/Downloads/ClimateWise_CCS_Report_Nov_2012_Full_Report.pdf, accessed 11 November 2016.

  • CNseg and BSD Consulting (2012) Relatório de pesquisa sobre a adoção dos princípios do Protocolo do Seguro Verde, from http://sustentabilidade.cnseg.org.br/, accessed 7 October 2015.

  • CNseg and BSD Consulting (2012a) Relatório de pesquisa sobre o alinhamento das práticas atuais aos Princípios para Sustentabilidade em Seguros. from http://sustentabilidade.cnseg.org.br/. accessed 7 October 2015.

  • CNseg (2015) Diretrizes de integração das questões ambientais, sociais e de governança corporativa à indústria de seguros, saúde suplementar, previdência privada e capitalização, from http://www.cnseg.org.br/data/files/44/50/54/F3/33A41510DCDAE315A88AA8A8/Diretrizes_ASG_CNseg_Resultante.pdf, accessed 10 October 2015.

  • CNseg (2016) Sustainability report of insurance sector, from http://www.cnseg.org.br/cnseg/publicacoes/relatorio-de-sustentabilidade/relatorio-de-responsabilidade-social-e-sustentabilidade-3.html, accessed 7 October 2016.

  • Crane, A., McWilliams, A., Matten, D., Moon, J. and Siegel, D. (2008) ‘The corporate social responsibility agenda’, in The Oxford Handbook of Corporate Social Responsibility, New York: Oxford University Press, Part I.

  • Cunha, F. (2013) ‘Performance analysis of sustainable investments in the Brazilian stock market: A study about the corporate sustainability index’, Journal of Business Ethics 117(1): 19–36.

    Google Scholar 

  • Daly, H.E. (1974) ‘Steady-state economics versus growth mania: a critique of the orthodox conceptions of growth, wants, scarcity and efficiency’, Policy Sciences 5(2): 149–167.

    Google Scholar 

  • Daly, H.E. (1990) ‘Toward some operational principles of sustainable development’, Ecological Economics 2(1):1–6.

    Google Scholar 

  • DeVellis, R.F. (1991) Scale Development: Theory and Applications, Newbury Park, CA: SAGE.

    Google Scholar 

  • Ebner, D. and Baumgartner, R. (2006) ‘The relationship between sustainable development and corporate social responsibility’, paper presented at the Corporate Responsibility Research Conference 2006, 4–5 September, Dublin, Ireland, from http://crrconference.org/Previous_conferences/downloads/2006ebnerbaumgartner.pdf, accessed 17 September 2016.

  • Elkington, J. (1998) Cannibals with Forks: The Triple Bottom Line of 21st Century Business, Gabriola Island, BC: New Society Publishers.

    Google Scholar 

  • Epstein, M. and Roy, M. (2003) ‘Making the business case for sustainability: Linking social and environmental actions to financial performance’, Journal of Corporate Citizenship 9(Spring 2003): 79–96.

  • Epstein, M. and S. Widener (2010) ‘Identification and use of sustainability performance measures in decision making’, Journal of Corporate Citizenship 40(Winter 2010): 43–72.

  • Freeman, R.E. (1984) Strategic management: A stakeholder approach, Boston: Pitman Publishing Inc.

    Google Scholar 

  • Garver, M. and Mentzer, J.T. (1999) ‘Logistics research methods: Employing structural equation modeling to test for construct validity’, Journal of Business Logistics 20(1): 33–57.

    Google Scholar 

  • Geneva Association (2009) The insurance industry and climate change—contribution to The Global Debate, from https://www.genevaassociation.org/media/201070/geneva_report[2].pdf, accessed 10 November 2015.

  • Geneva Association (2012) Extreme events and insurance: 2011 annus horribilis, from https://www.genevaassociation.org/media/200995/ga-2012-geneva_report%5B5%5D.pdf, accessed 8 November 2015.

  • Geneva Association (2014) The global insurance protection gap assessment and recommendations, s.l.: Kai-Uwe Schanz and Shaun Wang, from https://www.genevaassociation.org/media/909569/ga2014-the_global_insurance_protection_gap.pdf, accessed 8 November 2015.

  • Giddings, B., Hopwood, B. and O‘Brien, G. (2002) ‘Environment, economy and society: Fitting them together into sustainable development’, Sustainable Development 10(4): 187–196.

    Google Scholar 

  • Godfrey, P., Merrill, C. and Hansen, J. (2009) ‘The relationship between corporate social responsibility and shareholder value: An empirical test of the risk management hypothesis’, Strategic Management Journal 30(4): 425–445.

    Google Scholar 

  • Hair, Jr, J., Black, W., Babin, B. and Anderson, R. (1998) Multivariate Data Analysis, 5th ed., Upper Saddle River, NJ: Prentice Hall.

    Google Scholar 

  • Hair, Jr., J., Black, W., Babin, B. and Anderson, R. (2009) Multivariate Data Analysis, 7th ed., Upper Saddle River, NJ: Prentice Hall.

    Google Scholar 

  • Hoon Oh, C., Park, J. and Ghauri, P. (2013) ‘Doing right, investing right: Socially responsible investing and shareholder activism in the financial sector’, Business Horizons 56(6): 703–714.

    Google Scholar 

  • Husted, B.W., Allen, D.B. and Kock, N. (2015) ‘Value creation through social strategy’, Business & Society 54(2): 147–186.

    Google Scholar 

  • IUCN (1980) World conservation strategy—Living resource conservation for sustainable development, from http://www.environmentandsociety.org/mml/iucn-ed-world-conservation-strategy-living-resource-conservation-sustainable-development. accessed 6 June 2015.

  • Jacob, M. (1994) ‘Toward a methodological critique of sustainable development’, Journal of Developing Areas 28(2): 237–252.

    Google Scholar 

  • Johnson, H. (1971) Business in Contemporary Society: Framework and Issues, Belmont, CA: Wadsworth Publishing Company.

    Google Scholar 

  • Jöreskog, K.G., Sörbom, D. (1989) LISREL 7: A guide to the program and applications, Spss.

  • Karlsson, S., Dahl, A.L., Biggs, R., ten Brink, B.J.E., Guttiérez-Espeleta, E. Hasan, M.N.H., Stanners, D. (2007) ‘Meeting conceptual challenges: Sustainability indicators’, in T. Hák, B. Moldan and A.L. Dahl (eds) Sustainability Indicators: A Scientific Assessment, Washington, DC: Island Press, pp. 27–48.

    Google Scholar 

  • Kline, R. (1998) Principles and Practices of Structural Equation Modeling, New York, NY: Guildorf Press.

    Google Scholar 

  • Lapinskaite, I. and Radikaite, G. (2015) ‘Analysis of measurement of sustainable development in the insurance company’, European Scientific Journal 11(13): 446–464.

    Google Scholar 

  • Lélé, S. (1991) ‘Sustainable development: A critical review’, World Development 19(6): 607–621.

    Google Scholar 

  • Lemme C. and Wajnberg, D. (2009) Exame da divulgação do relacionamento entre iniciativas socioambientais e desempenho financeiro corporativo nos bancos brasileiros’, Revista de Gestão Social e Ambiental Jan. -Abr. 3(1): 53–69.

  • Likert, R. (1932) ‘A technique for the measurement of attitudes’, in Archives of Psychology, nos 141–146, New York, pp. 5–55.

  • Lloyd’s (2014) www.lloyds.com/BrazilMI, from http://www.lloyds.com/~/media/files/the%20market/tools%20and%20resources/new%20market%20intelligence/market%20presentations/latin%20america/br_mi_2013_11_27%20market%20presentation.pdf, accessed 18 February 2015.

  • Malhotra, N. (2012) Pesquisa de marketing: uma orientação aplicada, 6th ed. Porto Alegre: Bookman.

    Google Scholar 

  • Margulis, S., Dubeux, C. and Marcovith, J. (2011) Economia da mudança do clima no Brasil. Rio de Janeiro: Synergia.

    Google Scholar 

  • Marom, I. (2006) ‘Toward a unified theory of the CSP–CFP link’, Journal of Business Ethics 67: 191–200.

    Google Scholar 

  • Maslakovic, M. (2013) Financial market series, fund management, London from https://www.thecityuk.com/research/uk-fund-management-2014/, accessed 20 February 2015.

  • Mebratu, D. (1998) ‘Sustainability and sustainable development: historical and conceptual review’, Environmental Impact Assessment Review 18(6): 493–520.

    Google Scholar 

  • Metcalf, L., Benn, S. (2013) Leadership for sustainability: An evolution of leadership ability. Journal of Business Ethics 112(3): 369–384.

    Google Scholar 

  • Monteiro, M.H.; Galiza, F. (2016) Mulheres no Mercado de Seguros no Brasil, from https://www.funenseg.org.br/arquivos/estudo_mulher_.pdf, accessed 11 March 2017.

  • Montiel, I. (2008) ‘Corporate social responsibility and corporate sustainability: Separate pasts, common future’, Organization and Environment 21(3): 245–269.

    Google Scholar 

  • Morosini, R. (2016) Riscos e seguros Brasil, from http://riscosegurobrasil.com/materia/exclusoes-em-apolices-do-disparam-com-lava-jato-e-crise/, accessed 30 October 2016.

  • Nogueira, M. and Blount, J. (2016) Brazil charges 21 with homicide for failing to avert Samarco mine disaster [online], from http://www.insurancejournal.com/news/international/2016/10/24/430221.htm, accessed 21 October 2016.

  • Obalola, M. (2008) ‘Beyond philanthropy: corporate social responsibility in the Nigerian insurance industry’, Social Responsibility Journal 4(4): 538–548.

    Google Scholar 

  • Olowokudejo, F. and Aduloju, S. (2011) ‘Corporate social responsibility and organizational effectiveness on insurance companies in Nigeria’, The Journal of Risk Finance 12(3): 156–167.

    Google Scholar 

  • Orie, M. (2012) The UN shift from social research to protecting the environment to governance—from Stockholm to Rio 1992 to Rio + 20 to the principles of sustainable insurance. from https://www.genevaassociation.org/media/185206/ga2012-rm51-orie.pdf, accessed 10 October 2015

  • Pezzey (1997) ‘Sustainability constraints versus “optimality” versus intertemporal concern, and axioms versus data’, Land Economics 73(4): 448–466.

    Google Scholar 

  • Porter, M. and Kramer, M. (2006) ‘Strategy and society’, Harvard Business Review 84 (12): 78–92.

    Google Scholar 

  • PRI (2015) Report on progress 2015, from http://www.unpri.org http://2xjmlj8428u1a2k5o34l1m71.wpengine.netdna-cdn.com/wp-content/uploads/PRI_Report-on-Progress_2015.pdf, accessed 17 December 2015.

  • Reddy, T.L. and Thomson, R.J. (2015) Environmental, social and economic sustainability: implications for actuarial science, from http://www.actuaries.asn.au/Library/Events/ASTINAFIRERMColloquium/2015/ReddyThompsonActuarialSciencePaper.pdf, accessed 04 October 2016

  • Scholtens, B. (2011) ‘Corporate social responsibility in the international insurance industry’, Sustainable Development 19(2): 143–156.

    Google Scholar 

  • Scordis, N., Suzawa, Y., Zwick, A. and Ruckner, L. (2014) ‘Principles for sustainable insurance: Risk management and value’, Risk Management and Insurance Review 17(2): 265–276.

    Google Scholar 

  • Scott P. (2003) Insurers’ impact remains uncovered’, Environmental Finance 17(22).

  • Shalchian, H., Bouslah, K. and M’Zali, B. (2015) ‘A multi-dimensional analysis of corporate social responsibility: Different signals in different industries’, Journal of Financial Risk Management 4(2): 90–107.

    Google Scholar 

  • Shea, M. and Hutchin, J. (2013) The insurance industry must champion sustainability, [online], from http://www.wileyonlinelibrary.com

  • Staib, D. and Puttaiah, M. (2014) World insurance in 2013: Steering towards recovery, sigma, 3/2014, Zurich: Swiss Re Ltd.

    Google Scholar 

  • SUSEP (2012) Anexo—Circular Susep Nº 455, de 6 de dezembro de 2012, from http://www2.susep.gov.br/bibliotecaweb/docOriginal.aspx?tipo=3andcodigo=30333, accessed 27 January 2015.

  • SUSEP (2014) SES—Sistema de informações estatísticas da SUSEP. Opção escolhida: Seguros: Prêmios e Sinistros, from http://www2.susep.gov.br/menuestatistica/SES/principal.aspx, accessed 29 June 2015.

  • SwissRE (2012) Swiss Re puts spotlight on ageing and natural disasters in Asia at World Economic Forum summit in China, from http://www.swissre.com/global_partnerships/Swiss_Re_puts_spotlight_on_ageing_and_natural_disasters_in_Asia_at_World_Economic_Forum_summit_in_China.html, accessed 24 January 2015.

  • SwissRE (2016) Natural catastrophes and man-made disasters in 2015: Asia suffers substantial losses. from http://www.swissre.com/library/editors-pick/373820071.html, accessed 11 November 2016.

  • Tirole, J. (2001) ‘Corporate governance’, Econometrics 69(1): 1–35.

    Google Scholar 

  • UNEP FI (2004) The materiality of social, environmental and corporate governance issues to equity pricing, from http://www.unepfi.org/fileadmin/documents/amwg_materiality_equity_pricing_report_2004.pdf, accessed 9 December 2015.

  • UNEP FI (2009) The global status of sustainable insurance, from http://www.unep.org/pdf/Global_state_of_sustainable_insurance.pdf, accessed 9 December 2015.

  • UNEP FI (2012) PSI Principles for Sustainable Insurance, from http://www.unepfi.org/psi/wp-content/uploads/2012/06/PSI-document.pdf, accessed 15 August 2014.

  • UNEP FI (2015) Insurance 2030 harnessing insurance for sustainable development. from http://www.unepfi.org/psi/wp-content/uploads/2015/06/Insurance2030.pdf, accessed 19 September 2016.

  • Van der Vorst, R, Grafe-Buckens, A and Sheate, W.R. (1999) ‘A systemic framework for environmental decision-making’, Journal of Environmental Assessment and Policy Management 1(1): 1–26.

    Google Scholar 

  • Van Marrewijw, M. (2003) ‘Concepts and definitions of CSR and corporate sustainability: Between agency and communion’, Journal of Business Ethics 44: 95–105.

    Google Scholar 

  • Vose, D. (2008) Risk Analysis: A Quantitative Guide, 3rd ed., Hoboken, NJ: John Wiley & Sons.

    Google Scholar 

  • Waddock, S. (2004) ‘Parallel universes: Companies, academics, and the progress of corporate citizenship’, Business and Society Review 109(1): 5–42.

    Google Scholar 

Download references

Acknowledgements

This research would not have been possible without the accessibility and commitment of insurance professionals, and the contribution of CNseg, especially the Sustainability Committee. The authors would like to thank the support of the Conselho Nacional de Desenvolvimento Científico e Tecnológico (CNPq), The World Academy of Sciences (TWAS), the Fundação de Amparo à Pesquisa do Estado do Rio de Janeiro (FAPERJ) and the Coordenação de Aperfeiçoamento de Pessoal de Nível Superior (CAPES) for this research. We thank you all.

Author information

Authors and Affiliations

  1. Energy Planning Engineering, COPPE, The Alberto Luiz Coimbra Institute for Graduate Studies and Research in Engineering of The Federal University of Rio de Janeiro, Rio de Janeiro, Brazil

    Flávio G. Nogueira & André F. P. Lucena

  2. COPPEAD Graduate School of Business, The Federal University of Rio de Janeiro, Rio de Janeiro, Brazil

    Roberto Nogueira

Authors
  1. Flávio G. Nogueira
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. André F. P. Lucena
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Roberto Nogueira
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding authors

Correspondence to Flávio G. Nogueira, André F. P. Lucena or Roberto Nogueira.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Nogueira, F.G., Lucena, A.F.P. & Nogueira, R. Sustainable Insurance Assessment: Towards an Integrative Model. Geneva Pap Risk Insur Issues Pract 43, 275–299 (2018). https://doi.org/10.1057/s41288-017-0062-3

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/s41288-017-0062-3

Keywords

Search

Navigation