According to a survey conducted by GlobalData, 41.4% of UK consumers are willing to pay more for an insurance policy from a provider with a good record of sustainability, with a further 10.2% sitting on the fence.
Ben Carey-Evans, Senior Insurance Analyst at GlobalData, states, “These survey results come amid the COP27 conference, where leaders from all industries are meeting to discuss climate change solutions.
“The survey responses show that action from leading businesses and insurers make will be supported by UK consumers. UK insurers should start prioritizing sustainability, even if it means they have to charge higher premiums as a result.”
This same question was asked in previous GlobalData surveys, notably in its 2022 UK SME Insurance Survey, conducted in Q2 and Q3 2022.
At the time, this survey revealed that 65.3% of small businesses felt sustainability was either important or very important, but it was ranked towards the bottom out of a list of factors they considered when purchasing an insurance policy.
Carey-Evans suggests, “Our latest consumer data represents a shift from that sentiment, as a sizable proportion of potential customers are putting sustainability above price.
“While it may become harder for consumers to prioritize insurers that have a good track record for sustainability as the economic downturn really hits, it shows that consumers still feel very strongly about the issue and have certain expectations of businesses.”
GlobalData notes that one major way insurers can show they are taking action on sustainability is by cutting ties with polluting industries such as coal, gas, and oil. It adds that such action is becoming more common as pressure on them increases.
Cary-Evans concludes, “All leading insurers have targets for when they will stop working with high-pollution industries, but we are also seeing companies walking away from potential contracts now.
“This was seen recently with Marsh McLennan and Lockton exited its relationship with the Adani Enterprise’s Carmichael coal mine in Australia. Insurers can also be more proactive, with examples including Zixty and Lemonade planting trees based on miles driven by motor insurance customers, or Aviva committing to running its office in Perth, Scotland, fully on renewable energy.
“It is undeniable that sustainability should now be a core element of any insurer’s strategy, with GlobalData findings highlighting that it is something on which a significant proportion of potential customers will judge them.”
