The environment and human rights became part of insurance terms

In June 2021, we integrated sustainability into our underwriting. If’s corporate clients are expected to respect human rights, labour rights, the environment and anti-corruption. 

The ESG framework is based on the UN Global Compact, which is an international initiative that focuses on ten sustainable business principles concerning human rights, labour rights, environment, and anti-corruption. ESG stands for Environmental, Social and Governance. If now expects its corporate clients to follow these sustainable business principles in order to be insured by If. 

Kristine Birk Wagner works as Head of Underwriting for If’s large corporate clients. She explains why If chose to implement the ESG framework: 

– If, as part of Sampo, has been a corporate member of the UN Global Compact since 2019. The implementation of ESG into our underwriting is one of the steps If has taken to integrate sustainability into our business operations. It also supports our ambition to actively contribute to a more sustainable society.

The ESG framework is objective and even-handed for all client companies. We felt that looking at the same sustainability principles, regardless of the company’s business or industry, is the best way to proceed.

Why If chose to implement the ESG framework

For If’s existing and new customers, the implementation of ESG into underwriting standards means that customers who do not comply with ESG principles will have a dialogue with If’s specialists and might have to find another insurer.  

– We expect our client companies to comply with the UN Global Compact, even if they are not corporate members of the initiative themselves. We want to motivate and support our clients to move towards more responsible business practices. The companies are evaluated before we start a new client relationship or before a contract renewal. So far, we’ve had good and open discussions with our clients, and the change has been well received, says Wagner. 

Kristine Birk Wagner photo.
Kristine Birk Wagner, Head of Underwriting for If’s large corporate clients

Our intention is not to preach, but to work together with our customers for a better tomorrow.

Employees exited about the change

Karoliina Laine has been working with the internal implementation, where the sustainability principles have been integrated into If’s existing customer due diligence process for corporate clients. Relevant If employees received training on the principles of the UN Global Compact, norm-based research and the company’s new ESG framework. 

– Our employees have been excited about the change, and are pleased that If is a frontrunner in this area. If’s initial focus has been with large corporate clients, but the framework covers smaller companies as well, she says. 

Karoliina Laine photo.
Karoliina Laine, Network Manager

– To assess whether corporate clients are respecting the principles, we receive an ESG rating for each customer from an external service provider. We have also established internal ESG assessment teams that make decisions based on the external service provider’s research and grading and dialogue with the customer.  

A three step approach

If a breach of the UN Global Compact principles is detected, the corporate client in question will be notified. Ultimately, if the client company does not want or is not able to improve its practices, the client relationship could be terminated. 

– The external service provider ensures an objective evaluation. Possible issues might, for example, concern working conditions in a factory, insufficient anti-money laundering practices, or land rights at the company’s premises. We use a three step approach depending on the client’s grading and evaluation: 

  1. We keep monitoring the client but continue the client relationship as normal. 
  2. A conditional approval, which means requiring additional information from the client. 
  3. We decide not to enter into a relationship with a client, or terminate the relationship before the next contract renewal. 

Whatever the issue might be, Karoliina and Kristine want to emphasise cooperation above anything else:

– Our intention is not to preach, but to work together with our customers for a better tomorrow. 

Karoliina Laine photo.

Karoliina Laine

Manager in International Network Department, Espoo

Kristine Birk Wagner photo.

Kristine Birk Wagner

Head of Underwriting Industrial, Copenhagen

What would you like to read next?