Airmic Talks ESG: Parametrics - a valuable tool for financing ESG risks

Published on Tue, 26/07/2022 - 16:57

For businesses to substantially respond to Environmental, Social and Governance (ESG) challenges, they should be looking at their whole organisation through the ESG lens, according to Simon Edwards, Technical Parametric Underwriter at Generali Global Corporate & Commercial.

Edwards was speaking on the latest episode of Airmic Talks, the Association’s monthly podcast tackling ESG topics for risk and insurance professionals.

“ESG needs to be fully integrated into the business and can't just be this standalone element that you do occasionally in an ESG session,” he explained. “You have to look at everything through this ESG lens.

“Some of our customers are increasingly using ESG filters to pick their commercial partners. On recruitment and talent, for millennials, but even more so the generation Zs, are increasingly attracted to companies that have a genuine ESG strategy.”

Edwards specialises in parametric produces and, as such, works closely on how insurance can be used to address business challenges posed by the climate.

He cited the example of a tomato producer in Italy who used a parametric policy for agricultural cover to payout when a certain temperature is passed or there is a frost that interrupts the harvest.

“They had a frost, but they had a parametric payout which enabled them to quickly reseed because it was early in the season.

“That’s on a small scale, but parametric insurance is reasonably famous for its larger, government resilient products where rapid payout is the key selling point. That rapid payout is a fantastic mechanism for getting money to be where it's needed exceptionally quickly.”

Listen to the full interview with Simon Edwards on the Airmic Talks ESG podcast, available on all podcast platforms.