A framework to measure insurance impact: The insurance SDGs
Article information and share options
In 2020, the United Nations Environmental Programme Finance Initiative Principles for Sustainable Insurance (UNEP PSI) announced a programme to develop insurance SDGs (or iSDGs). The iSDG initiative aims to “systematically map links between insurance products and services and the SDGs; define frameworks for impact measurement; create industry-wide momentum and set ambitions; and execute on these joint targets”1
Inspired by this, Swiss Re Institute has been working with the International Cooperative and Mutual Insurance Federation (ICMIF)and other stakeholders across the industry to develop a set of iSDG indicators as well as impact calculation and scoring methodologies. The indicators are insurance adaptations of the UN indicators developed for countries. They aim to gauge the impact insurance has as in supporting sustainable environmental and societal business practices. These have now been tested and refined in an iterative R&D process since 2021.
Since 2020, Swiss Re Institute has been working with ICMIF and several of its members (as well as other insurers and industry associations) to review and refine iSDG indicators. Since 2021, ICMIF members have been working with Swiss Re Institute to calibrate indicators, scoring ranges, weights, and approaches reflecting ICMIF’s values and strategic focal areas, such as risk prevention and inclusive insurance. This process led to the creation of a first prototype of the ICMIF ‘commitment framework’ embedded into the ICMIF-calibrated Insurance SDG Calculator launched in October 2022 at ICMIF's Centenary in Rome.
This prototype has now been tested with ICMIF members throughout 2023, during which several ICMIF members have used it to calculate their iSDG company score. The latter is calculated using an insurance company's portfolio and business data, deriving metrics and scores for individual SDG indicators, for each iSDG, and for the company. Results are based on the calibration and scoring ranges agreed under ICMIF's ‘commitment framework’. The final score indicates the insurer's degree of progress towards supporting the iSDGs.
These individual company iSDG scores have now been anonymised and aggregated to produce the first ICMIF Insurance SDG Baseline to support ICMIF in its "Leading with Purpose" strategy. Read more here (About ICMIF - International Cooperative and Mutual Insurance Federation).
Further research and development efforts will be needed to continue to develop narratives, metrics and scoring ranges measuring insurance impact as new challenges emerge, new data becomes available, new standards and regulations are introduced, and new technologies are developed. Moreover, to enable better quantification and impact assessments, the insurance industry will benefit from continuing to strive to access granular quantitative data.
Swiss Re Institute's methodology powers Swiss Re's SDG Analytics. These assist insurers in measuring their impact at portfolio and product level, assess the impact on financial and sustainability metrics, and simulate transition scenarios to help them effectively plan transition strategies. Read more about translating data into insights (P&C Analytics).
As of 1.1.2025, Insurance SDG Calculator services will be offered by sim2sustain, our modeling partner who has co-developed the tool with us since 2020.