92% of European life insurers to increase ESG investments

Written by Adam Cadle

22/11/2023

Ninety-two per cent of European life insurers plan to increase their allocation to investments with a positive environmental and social impact, a survey commissioned by AlphaReal has revealed.

The survey of 100 European life insurance senior investment professionals in the UK, Germany, France, Switzerland, the Netherlands and Italy, said the remaining 8% plan to boost ESG investment in the future.

Of those European life insurers planning to increase their investments in assets with a positive environmental impact, half plan to do so by between 15% and 20% over the next two years. A quarter (26%) will increase by 10% to 15%; nearly a fifth (18%) will increase allocations by 20% to 25%; 5% say they will increase by 25% to 30%; while 1% will boost allocations between 5% and 10%.

Looking at increases to assets with a positive social impact, 40% of life insurers say those increases will be between 15% and 20% over the next two years; more than a quarter (27%) will increase by 20% to 25%; 22% will increase by 10% to 15%; 8% by 25% to 30%; and 3% will make an increase of between 5% and 10%.

ESG considerations are ‘very important’ for 22% of respondents to the survey and ‘important’ for more than three-quarters (77%); while only 1% say they are neutral on ESG issues. This is reflected in the high level of support respondents show to meeting Europe’s net zero carbon emissions target by 2050. Nearly all (94%) European life insurers interviewed by AlphaReal have a carbon net zero commitment while the remaining 6% plan to put one in place in the near future.

Edward Palmer, CIO, joint-deputy CEO and head of sustainability at AlphaReal said: “The insurance industry is essential in helping to drive investment in long term projects such as green energy and social infrastructure, including affordable housing, schools and hospitals. This research shows the importance placed by the sector in providing the necessary capital to support progress towards environmental and social goals.”

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