Insights / Reports
Harnessing ESG Data to Improve Commercial Underwriting
Why accurate ESG data matters for commercial insurance underwriting and risk selection
For commercial insurance underwriters pricing ESG and climate risk.
Key findings
- Manual ESG assessment can take up to four hours per risk, making portfolio-wide underwriting inefficient.
- ESG scores show a positive correlation with underwriting performance, especially in property insurance.
- Nature-related and climate-related risks are material but difficult to assess without consistent, localized data.
- Veridion’s weekly updated ESG data adds visibility into environmental, social, and governance risk signals, including SMBs.
Overview
What this report covers
A June 2024 whitepaper on how ESG data improves commercial underwriting by reducing manual effort, improving risk materiality assessment, and supporting better pricing and coverage decisions.
4 hrsunderwriters spend manually assessing each ESG risk (Better Insurance Network)
$9Bin premiums studied linking ESG ratings to underwriting performance (Howden & Fidelis)
$10.5B3M settlement over PFAS contamination liability
Inside the report
Questions this report answers
- Why is ESG risk assessment still a four-hour, data-starved manual process?
- How strongly do ESG ratings actually correlate with underwriting loss ratios?
- How do nature and climate risks translate into real underwriting exposure?
- What does a single chemical manufacturer’s hidden ESG profile reveal at renewal? (case study)
- How does weekly-updated ESG data sharpen pricing on hard-to-cover SMBs?
Over half of insurers and re-insurers believe that nature-related risk is material to their underwriting business, yet nature risk is not being assessed by underwriters.
Contents
What’s inside
- Why ESG risk assessment is so burdensome today
- The correlation between ESG risk and underwriting performance
- ESG risk materiality in commercial insurance
- Mitigating catastrophic and nature-related risk
- Case study: evaluating a true risk profile with Veridion ESG data
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