a.s.r. is committed to making a positive contribution to a more sustainable society by working to create solutions and playing a leading role in the related financial sector. a.s.r. does so through its investments and by developing sustainable products and services, to aid the transition to an inclusive sustainable society and to minimise negative impacts.
Product Approval & Review Process
The Product Approval & Review Process (PARP) is one of the internal processes for assessing the quality of products and services and their relevance for customers. The PARP ensures that a newly developed or improved product is reviewed before it is offered. It encourages continual improvement based on feedback from customers and advisors, social developments, and current circumstances, such as the impact of inflation and changes in legislation and regulations. The PARP applies to products that a.s.r. actively offers, as well as to inactive products and services that are regularly revised. In accordance with the assessment framework of the AFM and in line with legislation and regulations, a.s.r. set up the PARP tests, which relate to matters including cost efficiency, usability, safety and transparency.
The PARP checks the product against various criteria, including several criteria related to sustainability.
Interests of customers
Products and services are checked against the following criteria:
Cost-effectiveness. An insurance product is cost-efficient if it is perceived by the designated target group as having a good price-quality ratio;
Usefulness. A useful insurance product is one that meets the needs of the designated target group in an appropriate way;
Safety. An insurance product is safe if it delivers what it promises and the possible outcomes are acceptable to the designated target group;
Comprehensibility. A comprehensible insurance product is one whose quality and suitability can be adequately assessed by the intended target group;
Ethical data use. The product is assessed against the Ethical Framework for data-driven applications, which is developed in collaboration with the Dutch Association of Insurers (Verbond van Verzekeraars).
Interests of society
Products and services are assessed on their positive or negative impact on society. This supplementary assessment was devised in 2021 and refined in 2022 in response to adjustments to the Insurance Distribution Directive (IDD). Product development teams are now asked to consider a product’s impact on society and specifically to indicate what sustainability factors might apply to it. The term ‘sustainability factors’ includes ecological, social and employment aspects, respect for human rights and combatting bribery and corruption. The PARP can also ask further questions concerning identified sustainability factors, and these answers are factored into underwriting decisions.
The sustainability factors of an insurance product are then presented to the distribution channel in a transparent way. This is done, for example, through the distribution chart which details the product’s sustainability target group, and the a.s.r. website, on which its sustainability factors are published. For instance, the distributor is given help in advising the customer on their sustainability requirements and preferences and in giving advice that takes account of the target group as described by a.s.r.
In the PARP process, Risk Management, Legal Affairs, Compliance and the Actuarial Function (AF) each assess all product-related financial and non-financial risks for a.s.r.
In 2022, the PARP Committee assessed 9 product adjustments (2021: 9) and 14 reviews (2021: 15) of existing products. Active products are reviewed at least every three years and inactive products are reviewed at least every five years.
Sustainable insurance
a.s.r. has developed a Sustainable Insurance Policy. This sets out how a.s.r. will integrate sustainability into insurance processes, such as underwriting, pricing and product development. This policy was evaluated during 2022. The Sustainable Insurance Policy provides for an inventory of ESG risks when accepting new customers and drawing up new contracts. The aim is to be able to adequately decide whether or not to accept the customer. The ESG risk inventory is an extension of a.s.r.’s Customer Due Diligence policy. Five ESG risk inventories were carried out in 2022 (2021: 3).
In the event of significant or multiple ESG risks, the salesperson or underwriter will escalate the risk inventory to the Underwriting Team, which can then decide whether to refuse a customer on the basis of ESG risks or to accept them under certain conditions (such as an undertaking to limit ESG risks). In 2022 this was done three times.
Throughout the contract period, a.s.r. checks periodically (frequency depending on level of risk) whether the customer matches the risk profile and the pattern of transactions is in line with expectations. Alongside these checks, a.s.r. regularly discusses with customers sustainability in general and ways to limit ESG risks in particular.
As well as discussions with customers, a.s.r. organises meetings for intermediaries and underwriters. These were aimed at transferring knowledge and raising awareness about ESG risks, substantive insurance-related topics, dilemmas, high impact cases and social developments. In 2022, five sessions were organised for intermediaries (2021: 2) and two sessions for underwriters (2021: 1).
In the underwriting process, a.s.r. also encounters potential customers who could have a positive impact on sustainability. a.s.r. has therefore opened a Sustainability desk which advisors can address with questions about new sustainable initiatives and whether they are insurable with a.s.r. This route ensures that such new sustainable initiatives are always discussed and assessed for their insurability. By gaining as much knowledge as possible about risks, a.s.r. wants to make as many new sustainable initiatives as possible insurable.
Examples of sustainable products and services
Climate change and energy transition
a.s.r. wants to help customers protect themselves from the risks of extreme weather, for example by offering coverage against flooding. a.s.r. also helps customers to become more sustainable. Examples are:
Sustainable and circular repairs. Customers can have damage repaired sustainably by a network of certificated repair companies. Within the ‘mobile electronics’ coverage, they can opt to have the damaged item repaired instead of replaced. If repair is not possible, items can be handed in and replaced by a refurbished or pre-owned equivalent. This service was developed and launched in 2022. In 2022, 69% of Traffic (Verkeer) was repaired sustainably (year target: 65%). The February storms at the beginning of 2022 had a negative impact on the sustainable recovery results in Fire insurance. Because so many damages were reported at the same time, some had to be resolved immediately, which meant that replacement was chosen. 19% was repaired sustainably in 2022;
Sustainability mortgage (Verduurzamingshypotheek). Mortgage customers can take out a loan at an extra-low rate of interest to make their homes more sustainable. The loan can only be used to cover energy conservation measures;
Sustainable buildings and contents insurance. a.s.r. extended its residential buildings and contents insurance in 2022. As well as covering solar panels, heat pumps, (mini) wind turbines and electric charging points, there is now an option to make buildings more sustainable following damage. This allows customers to make their homes more sustainable when repairing damage, for example by installing a green rooftop, making gardens more eco-friendly, installing triple glazing or insulating walls or roof spaces.
Financial self-reliance and inclusiveness
a.s.r. wants to help people make carefully considered financial choices in order to prevent them from falling into debt, or to get them out of debt, for example through the following initiatives:
I think ahead (Ik denk vooruit). An online tool to help people make carefully considered financial choices.The tool is an accessible way of providing insight into a customer’s long-term financial situation and is available for both customers and non-customers;
Mortgage for new entrants (Startershypotheek). New entrants to the residential market are given a longer repayment term to make their housing costs more affordable;
Funeral insurance for people covered by power of attorney (e.g. individuals with a mental incapacity). Cover can be organised without unnecessary obstacles and queries relating to health.
Vitality and sustainable employability
a.s.r. is committed to preventing illness, absenteeism and incapacity for work and to encouraging sustainable employability, for example through:
a.s.r. Vitality. A wellbeing programme that encourages customers to make healthier choices;
Doorgaanverzekering. An occupational disability insurance with supplementary health cover that gives employers and the self-employed prevention tools to boost the sustainable employability of employees and prevent extended absenteeism, for example through mindfulness courses and personal health checks;
De langer mee AOV. An occupational disability policy for self-employed people with physically demanding jobs which includes extra services such as coaching interviews with occupational health experts, personal health checks and advice on retraining.
Pricing policy
Within the framework of its regular pricing policy, a.s.r. focuses on making sustainable product elements insurable and affordable. Sustainability including climate change is therefore explicitly made part of the pricing process. In the risk analysis for the pricing of Non-life products, for example, the impact of climate change on the cost of claims, now and in the future, is taken into account.
Implementation of products and services
a.s.r. integrates sustainability in its operations by working as sustainably as possible. Inspections, for example, are conducted online wherever possible and the amount of printed mail is kept to a minimum. For data-driven applications, use is made of an ethical framework which is adopted in the form of binding self-regulation devised by the Verbond van Verzekeraars. The aim is to ensure that data-intensive processes, products, services and applications which affect the customer take account of ethical criteria such as the customer’s autonomy and privacy, the prevention of exclusion and discrimination and the incentivisation and monitoring of the insurability of vulnerable groups or socially relevant activities in society.
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