Study: Higher ESG ratings, lower loss ratios

Higher ESG ratings lead to better underwriting performance, according to a new joint study today by international insurance broker, Howden, and specialty insurance and (re)insurance business Fidelis.

The study of loss ratios across 30,000 policies from Howden and Fidelis’ datasets comprising a premium value of around USD9 billion, against third party ESG ratings, is the largest study that has been conducted to date to establish the link between these factors. Of the multiple lines of business studied, property insurance shows the strongest correlation between better ESG scores and better loss experience.

David Howden, CEO, Howden Group Holdings says: “It’s great to see the proactive approach that Fidelis and other insurers are taking to better understand the link between ESG profiles and risk.  The data backs up our long-held belief that clients should be rewarded for high ESG credentials.”