Green and sustainability bond issuance by insurers may continue to grow - AM Best

Written by Adam Cadle

07/10/2019

Green and sustainability bond issuance by insurers may continue to grow, according to AM Best.

AM Best associate director Michael Dunckley said: “Although insurers currently account for a very small proportion of the total issuance of the ESG bond market, given the strong reception these issues have had, other insurers around the globe may begin issuing more such bonds.”

In its commentary, Green and Sustainability Bond Issuance by Insurers May Continue to Grow, AM Best also noted that national efforts to accelerate green initiatives could provide incentives for green bond issuers, gaining them access to a broader field of investors, which creates more competition at placement and could result in lower financing costs.

Senior finance analyst Jessica Botelho-Young added: “A further benefit of green bonds is the likelihood they will enhance a company’s public image through its green credentials. Insurers that have issued green bonds to date have large retail operations and are keen to boost their brands’ perception and goodwill.”

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