a.s.r. is committed to achieving a positive contribution to a more sustainable society by working to create solutions and playing a leading role in the financial sector. a.s.r. does so through its investments and by striving to develop sustainable products and services, to aid the transition to an inclusive sustainable society and to minimise negative impacts. a.s.r. develops products and services that help to resolve societal problems focusing on its three strategic sustainability themes as introduced in section 2.1.
Sustainable insurance
a.s.r. strives to achieve positive impact and minimize its negative impact as much as possible with its insurance products and services. a.s.r.’s Sustainable Insurance policy sets out how environmental, social and governance (ESG) aspects are integrated into its insurance processes, such as underwriting, pricing, working processes and product development. The Sustainable Insurance Policy applies to all business units of a.s.r. that offer insurance products and services.
In 2023, a.s.r. published interim net zero targets for 2030 for its non-life insurance portfolio. These targets are part of the commitment of a.s.r. to make its entire insurance portfolio emission neutral by 2050.
One of the targets is a 26 percent absolute reduction of the business and private passenger car portfolio combined in a.s.r. Non-life. In 2023, a slight decrease was realised compared to the base year 2022, despite an increase in premiums received.
| | 2023 | 2022 | ||||
|---|---|---|---|---|---|---|
| | Total | Provincial | Mandated agents | Direct channel | Total | |
| | Reduction in %1 | tCO2 | tCO2 | |||
| Private passenger | 2.4 | 116,796 | 27,794 | 83,194 | 5,809 | 119,663 |
| Business | -5.8 | 49,783 | 27,966 | 21,818 | - | 47,060 |
| Total | 0.1 | 166,579 | 55,760 | 105,012 | 5,809 | 166.723 |
- 1 % reduction compared to baseline year 2022. For more details about the target on insurance related emissions, refer to 8.1 About this report.
Product Approval & Review Process
The Product Approval & Review Process (PARP) assesses the quality of products and services and their relevance for customers. In the PARP, Risk Management, Legal Affairs, Compliance and the Actuarial Function (AF) each assess all product-related financial and non-financial risks for a.s.r. 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 economic conditions 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 2023, the PARP Committee assessed 12 product adjustments (2022: 9) and 18 reviews (2022: 14) of existing products. The PARP regulation prescribes that active products are reviewed at least every three years and inactive products are reviewed at least every five years.
In accordance with the assessment framework of the Dutch Authority of the Financial Markets (Autoriteit Financiële Markten; AFM) and in line with legislation and regulations, a.s.r. set up the PARP tests based on interests of customers and society, which relate to matters including cost efficiency, usability, safety, transparency, and several criteria related to sustainability.
In 2023, a.s.r. received feedback from the AFM on three files that have resulted in supervisory measures being taken. Two cases involved informal measures. The third file relates to an AFM investigation at several institutions into the product review process. Here, the AFM concluded that a.s.r. should substantiate certain aspects more extensively during this process. Required action has been taken.
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 and/or negative impact on society, including the following criteria:
Environmental, social and employment aspects;
Respect for human rights;
Combatting bribery and corruption.
The PARP board can also ask further questions concerning identified sustainability factors, and these answers are factored into underwriting decisions.
Underwriting
The Sustainable Insurance Policy provides guidance for an ESG risk inventory when accepting new business 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 addition to a.s.r.’s Customer Due Diligence policy. ESG risks pop-up when prospects are on the exclusion list of a.s.r. asset management or operate in sensitive sectors including gambling, armaments, tobacco, fossil fuel, and exploitation of animals. In the event of an ESG risk, the sales representative 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 accept them under certain conditions. In 2023, this was done five times, resulting in one contract not being extended (2022: 3).
The Sustainable Insurance Policy was updated in 2023. A distinction is made between the provision of Life and Non-life cover. In the case of Non-life cover, where there is a direct contribution to the facilitation of economic activities, producers of thermal coal and unconventional oil and gas products are not accepted as customers by a.s.r. Non-life customers linked to the fossil fuel industry must be able to demonstrate that they have a transition plan in line with the goals of the Paris Agreement. For Non-life clients who operate within the fossil (fuel) industry, there is still an ESG risk consideration to be made.
Throughout the contract period, a.s.r. checks periodically if the customer still matches the risk profile and that 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, e.g. in the Council of Doing.
As well as discussions with customers, a.s.r. organises knowledge sessions for both intermediaries and underwriters. These sessions are designed to transfer knowledge and raise awareness concerning ESG risks, substantive insurance-related topics, dilemmas, high impact cases and societal developments. In 2023, 11 sessions were organised for intermediaries (2022: 5) and two sessions for underwriters (2022: 2).
In the underwriting process, a.s.r. also encounters potential customers who can have a positive impact on sustainability. A Sustainability Desk has been installed to which advisors can address questions about new sustainable initiatives and whether they are insurable with a.s.r. This route ensures that such new sustainable initiatives are discussed and assessed for their insurability. By gaining as much knowledge as possible about risks, a.s.r. wants to make new sustainable initiatives insurable.
Dilemma: Should a.s.r. insure employees of companies it does not invest in?
a.s.r. invests customers’ contributions in accordance with a.s.r.’s Socially Responsible Investment (SRI) policy. This means not investing in countries and companies that do not meet a.s.r.’s ESG (sustainability) criteria. Companies active in weapons, the tobacco industry, gambling, the production of unconventional fuels (such as thermal coal) and companies that violate human rights and/or provide poor working conditions are excluded.
That a.s.r. does not invest in these sectors is only logical given its sustainable ambitions. A resulting dilemma is: should a.s.r. still offer pension insurance to employees working at companies that are excluded as far as a.s.r.’s investments are concerned?
Several considerations are relevant in this context. For example, as an investor, a.s.r. wants to make sustainable impact by not facilitating the economic activities of certain sectors. But companies in the tobacco industry for example, are also keen to offer their staff a good pension scheme so that they can be assured of a good income. They have worked hard for decades in an industry that was previously considered as a normal industry and was socially accepted.
Before offering any company a pension scheme, a.s.r. reviews its business activities to see if they comply with a.s.r.'s Sustainable Insurance policy. If the company complies with this policy but there is a potential ESG risk, the situation will be assessed on an individual basis. There is a moral distinction between facilitating (unsustainable) business activities and insuring the employees of that company. Also relevant in such assessments is whether companies are in the process of adjusting their operations by, for example, having a transition plan that includes producing cleaner products. Consider, for example, the transition in the fossil fuel industry to cleaner fuels, or the green production of steel in the future. Supporting these transitions helps the transition to a cleaner world.
Such dilemmas are considered from different angles to promote ethically self-aware and morally verifiable actions and provide perspectives for action for the market. During the entire process, a.s.r. ensures that the potential client meets its internal CDD policy and all applicable CDD regulations.
Pricing
Within the framework of its regular pricing policy, a.s.r. focuses on making and keeping sustainability risks insurable and affordable. Sustainability risks, such as those relating to climate change, are explicitly made part of the pricing process. In the risk analysis for the pricing of non-life products, for example, the impact of extreme weather on the cost of claims in the past, present and future is factored in.
Working processes
a.s.r. integrates sustainability into its operations. For example, inspections are conducted online wherever possible and the volume 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 Dutch Association of Insurers. 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.
Products and services with sustainable features
Financial self-reliance and inclusiveness
Ik denk vooruit: An online tool for customers and non-customers that provides insight into their long-term financial situation and helps people making carefully considered financial choices.
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. 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 sustainable employability of employees and prevent extended absenteeism.
De langer mee AOV: An occupational disability policy for self-employed people with physically demanding jobs which includes extra services such as coaching interviews and personal health checks.
Sustainable living
Sustainable and circular repairs: Customers can have damage repaired sustainably by a network of certificated repair companies. If repair is not possible, items can be handed in and replaced by a refurbished or pre-owned equivalent.
Verduurzamingshypotheek: Mortgage customers can take out a loan at an extra-low rate of interest to make their homes more sustainable.
Sustainable buildings and contents insurance: As part of its home and contents insurance, a.s.r. covers solar panels, heat pumps and electric charging points, and offers an option to make buildings more sustainable following damage.