InsuranceERM Annual Awards 2022 - UK & Europe

Data solution of the year: Moody's

Increased regulation of ESG, climate and sustainability disclosures across Europe, alongside greater interest from customers and stakeholders, is driving the insurance market to respond.

The EU's Sustainable Finance Disclosure Regulation (SFDR), for example, imposed mandatory ESG disclosure obligations for asset managers and other financial markets participants from 10 March 2021. The SFDR was introduced alongside taxonomy regulation and the Low Carbon Benchmarks Regulation as part of a package of legislative measures on sustainable finance.

Moody's has reacted to these trends and is an active player in the ESG data market. Its ESG solutions aim to help insurers better understand ESG performance, assess climate and environmental risk exposure, strengthen sustainability action plans and communicate with key stakeholders.

During 2021, Moody's launched a comprehensive suite of solutions that help respond to the diverse range of ESG-related goals in risk management, as well as credit and equity markets. And the provider says many leading companies in the insurance industry are already using its solutions.

InsuranceERM's judging panel praised the progress Moody's ESG Solutions has made in enhancing coverage across its products. This includes controversy risk assessments on 10,000 companies and physical risk scores for 5,000 companies by early 2022.

In one client user case, for example, Moody's provides ESG scoring datasets, allowing underwriters to price ESG risks, manage exposures and monitor threats on an ongoing basis. The ESG data can also be incorporated into pricing.

Moody's says there are several factors that make its ESG solutions unique in the insurance segment. This extends from company pre-screening based on predictive analytics, through assessments of an entity's exposure to many forms of ESG and climate risk, to ongoing monitoring of portfolios to ensure future resilience, according to Moody's.

InsuranceERM's judges awarded Moody's the winner of this data category for providing a "comprehensive tool that meets a pressing industry need" and a "strong wide-ranging proposition, with lots of detail in support, and wide client use."