Monday, February 26, 2024

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More captives to sign up to the UN’s PSI – Ciaran Healy

Aon’s Ciaran Healy is confident more captives will sign up to the United Nations’ Principles for Sustainable Insurance (PSI) with Enel Insurance a “proof of concept” that others should be able to follow.

Captive Intelligence revealed last week that the Netherlands-domiciled captive owned by Italian multinational energy company Enel had been the first signatory to the PSI.

In GCP #76, recorded at the European Captive Forum in Luxembourg, head of insurance Antonio Nervini explained how the captive had used four pillars to deliver value to the group’s sustainability initiatives.

He also made a rallying cry: “It’s time for captives to join the PSI. It’s time to take action.”

Healy and Butch Bacani, programme leader for the UN’s Principles for Sustainable Insurance, also provided further context on the PSI and why they felt it was an important development for captives to recognise and sign up to them.

“The starting point in helping clients understand the sustainability agenda and how it relates to a captive, I always refer to the PSI,” Healy said.

“It occurred to me that a captive actually has a very unique place in this dynamic. It’s sort of the nexus between the real economy or the corporate and I guess what the UN is trying to achieve.

“Making the captive part of that ecosystem and aligning with the structures that Butch has put in place made complete sense.

“And so, understanding the work that Enel had done anyway, they were quite progressive in their captive and how they think about sustainability – Enel as a group is obviously leading from an energy perspective in terms of sustainability – it made sense just to join the two together.”

There are now 220 insurance organisations signed up to the PSI, with the insurers representing one third of global premium and $15 trillion of assets under management.

Aon was the first broker to join the PSI in 2018, which has ultimately led to the work with Enel Insurance on them becoming a signatory.

“Enel Insurance is a very good start on how the engagement with the captive insurance industry could actually be driving positive outcomes for sustainable development,” Bacani said.

“So we believe this is just simply a work in progress as part of the maturity of the PSI, and we’re happy that we are at this stage right now.”

Healy echoes Bacani’s ambition and Captive Intelligence understands a handful of other captives are at an advanced stage in preparing to sign up to the UN’s Principles for Sustainable Insurance.

Healy is “more than hopeful” that there will be further captive signatories to the PSI in the coming months.

“What this is going to do and the work that Enel has done is a proof of concept that a captive actually has a role to play and can do something very positive around sustainability,” he added.

“There is a little bit of a myth of ‘well, the captive is small, I can’t do much around it’.

“But when you think about the protection gap, captives can potentially access reinsurance. So we can make that connection between the corporate ESG agenda, and actual issues on the ground. That’s a really important point.

“I would be absolutely certain, especially after listening to this, that we will get a lot more enquiries and a lot more captives signing up to the PSI.”

To read the Report authored by Aon and the United Nations on Using a Captive Insurance Company to Drive Positive ESG Outcomes, click here.