Chaucer’s Fowle calls for collaboration on ESG data collection

The chief executive of Chaucer has called on insurers to collaborate on developing a coherent way of collecting environmental, social and governance (ESG) data on their clients.

The specialty re/insurer recently partnered with Moody’s to introduce an ESG scorecard across its underwriting portfolio that measured its clients’ sustainability objectives and outcomes.

Speaking to Insurance Day, John Fowle said he wanted to start a conversation with others in the industry to find ways to standardise the collection of ESG data from clients.

“What we really want to do is compare notes with other informed people in the market, people who want data integrity… because then we can start putting pressure onto each other to push the momentum along,” he said.

“This is an area where you want to be talking to your competitors about what you are doing because we all overlap with each other on the business, we often sit on the same slips. So, we want to see who's pulling in the same direction and maybe start to get a bit of a common vocabulary and a common view on what the right data points are.”

Standardisation would help ease the burden on clients and help encourage them to share their own data, the chief executive said. “Putting myself in the shoes of a large, sophisticated insured: if they're buying seven or eight key towers of insurance through maybe three or four different brokers with maybe 30 different carriers, all of whom are asking them to fill out different questionnaires – that’s horrible [for them],” Fowle said.

In September, Chaucer rolled out its ESG card across all its underwriting portfolios, which it developed and implemented alongside Moody’s. The scorecard collates 158 datapoints on is clients across a range of measurable ESG indications – including on the disclosure of greenhouse gas emissions, health and safety of workers and boardroom diversity – with the aim of giving underwriters more visibility of a client’s current ESG performance.

Fowle explained that Chaucer will often package a range of cover for complex clients, so the scorecard will help identify which bits of a client’s business matches up with its own ESG ambitions, and where a client might need improvement. “We're insuring all these elements because they buy some sort of package policy. How much is in the areas that one might consider as detrimental to [for example] the environment and which ones do we think are beneficial to the environment?”

He continued: “Where are they now and what are they telling us about where they're going? And then bringing it back to the commercial bit, how can we underwrite their risk through that transition?”

He added that where a businesses is already in a good place and sustainability is part of their normal operating practice, “that's quite an easy thing to underwrite and each year is going to be relatively similar to the previous year”. Transition programmes on the other hand usually involves investment by the business, and specialty insurers were well place to take away the non-business risk, such as political risk, political violence, natural catastrophe, construction, Fowle said. 

“In our world what drives insurance spend? It's investment,” said Fowle. “Transition creates all sorts of new and interesting underwriting risks and, for specialty insurers, that’s what we pride ourselves on: we can look at a company, understand what they're doing and start to bespoke coverage around that leaves them in a place where they have appropriate insurance for their enterprise.”