How important is ESG for insurance customers?

Environment, Social and Governance (ESG) has become increasingly important for insurance companies recently. This is mainly due to the increasing public discussion about climate change and political efforts for climate protection. However, the topic is not new. Insurance companies are addressing this issue, but are still finding it difficult to implement ESG beyond investment products.

It’s no surprise, then, that insurers believe ESG is important to customers and consumers. This year, a survey proves the importance of ESG to consumers.

But how important is ESG to consumers in terms of their experience with insurance brands and products? Is it a trending topic overall?

Customer opinions beyond surveys are difficult to evaluate and predict

The evaluation of trending topics is usually done with surveys and polls. The results of these surveys depend on the questions asked. If ESG is an important topic in a survey, consumers will most likely confirm it positively.

Therefore, Insaas.ai focuses on unaided, free text feedback from public sources. Here, consumers and customers comment on all topics relevant to them without being explicitly asked.

For the FinTech Forum Frankfurt on November 18, Insaas.ai’s data science team aggregated 223,000 entries on 26 insurance brands in Germany, Austria and Switzerland from 2011 to Q3 2021.

All entries were clustered by sentiment and dimensions such as “Sustainability & ESG”, “Benefit”, “Friendliness” and “Advice”. This makes it easy to identify trends for ESG, product and service. Similarly, we can identify what is most important to customers, such as settlement. For this analysis, the team focused on customer feedback from a public web source.

ESG is very relevant for some insurers, but not for all

The result of this analysis was surprising to the team:

Overall, the positive momentum for ESG has waned lately, and especially since 2011. The positive intensity of posts on the topic declined significantly in 2021 for all 26 insurers compared to 2012-2015.

This suggests that customers are noticing ESG efforts, but are not very satisfied with the products and offerings in the market. The percentage of contributions to ESG is relatively low (6.6%) compared to issues such as performance (26.4%) and advice (24.1%). While the trend for ESG has declined in 2021, we see a positive trend for the third quarter (this can be considered a seasonally recurring trend). ESG is expected to gain renewed importance in the eyes of consumers starting next year.

However, the importance of ESG for 26 insurance brands needs to be differentiated. While well-known and established German insurance brands show a negative trend for ESG and only a few mentions, insurance companies like Barmenia are recognized for their efforts and gain attention. Insurance companies from Switzerland also show more positive mentions compared to German insurance companies.

Overall, ESG is an important topic for insurance companies, but it has lost momentum over the years and shows varying results for different insurance companies. Apparently, consumers still have a hard time seeing clear and transparent implementation in many insurance products.

If you are interested in details and the full results, please do not hesitate to contact us via info@insaas.ai.