As the world moves towards a low-carbon future, the financial services industry will play a crucial role in providing the capital and insurance needed for the transition. However, without innovative financial solutions, this transition will be impossible. That’s why it’s important for insurance executives to start thinking about sustainability and innovation.

In a recent roundtable conversation hosted by Capgemini, sustainability and business experts discussed the key sustainability trends in financial services. Here are five steps insurance executives can take to innovate for sustainability:

Step 1: Appoint a Chief Sustainability Officer

Many major financial services organizations are now appointing chief sustainability officers who are focused on developing teams that are finding new ways to measure and manage things. This measurement is implicit in data, which is the second trend identified by Sankar Krishnan, Executive Vice President, Head of Digital Assets & Fintech at Capgemini.

Step 2: Create Enterprise-Wide Data Systems

Banks around the world are creating enterprise-wide data systems so that they can see across everything and take corrective action by measuring what is good, what is not good, and what is failing. These insights enable chief sustainability officers to define a robust data strategy.

Step 3: Hyper-Personalize Products

Financial services organizations are saying they are not making enough money when they give green discounts, and that products and services aren’t meeting the needs of their customers. Firms are therefore thinking about how they could hyper-personalize products to meet what’s happening in different geographies and different zip codes, especially on the property and casualty side.

Step 4: Think About the Impact on Life Insurance

Firms are also thinking about the impact on life insurance, with changes to the planet and to life expectancies. There are many moving parts around how organizations might make money without discounts but also without driving up prices, while at the same time offering products that really meet the demands of customers.

Step 5: Embrace Regulation

Finally, there is the onset of a lot of regulation. Most of it today is self-regulation, but also institutions like the Federal Reserve are starting to take notice. Insurance executives should embrace regulation and use it as an opportunity to innovate for sustainability.

At Riskwolf, we enable insurers to build and operate parametric insurance at scale. With unique real-time data and dynamic risk modelling, we can turn real-time data into insurance. If you’re an insurance executive looking to innovate for sustainability, get in touch with us today to learn more about how we can help.

Original source: Capgemini