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SESSION 15. Sustainability in the insurance sector

15. Sustainability in the insurance sector.

Filippo di Pietro (Universidad de Sevilla).
María Dolores Oliver-Alfonso (Universidad de Sevilla).
Antonio Trujillo-Ponce (Universidad Pablo de Olavide). atrupon@upo.es 

ABSTRACT

The business model of the insurance sector is particularly suited to supporting sustainability (High-Level Expert Group on Sustainable Finance; Interim Report to Advice on Developing a Comprehensive EU Strategy on Sustainable Finance, July 2017). The insurance industry plays a significant role in investments across different classes of assets, being one of the largest institutional investors in the world. However, the implementation of the ‘market consistency’ principle in Solvency II may lead to excessive penalization of long-term investments and/or illiquid assets, with negative effects on sustainability. Moreover, the prudential regulatory regime for insurance companies set out in Solvency II does not explicitly require sustainability issues to be addressed by firms or supervisors. Recognizing sustainability issues more explicitly could facilitate investment in (green) infrastructure projects. Sustainability factors should be incorporated into each of the three pillars of the prudential framework but without undermining the stability of the financial system.

This Section will comprise a selection of papers addressing concerns linked to the role of insurance companies and pension funds in sustainability. It may include, among others, the following topics: i) consideration of adjusting Solvency II to enable greater investment by insurance companies in sustainable equity and longterm assets; ii) analysis of the three Pillars of the new prudential framework in the context of sustainable finance; iii) the study of the environmental commitment of insurance companies and their implications for financial performance and iv) the way in which insurance companies integrate the environment into their business model, the development of environmental management actions and the promotion of environmental responsibility.

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