RenRe to measure environmental impact of reinsurance portfolio with Moody’s

RenaissanceRe, the Bermuda headquartered reinsurance firm with a significant third-party ILS capital management unit, is partnering with Moody’s Analytics to benchmark the environmental impact of risks within its treaty reinsurance portfolios.

With RenaissanceRe (RenRe) managing a significant amount of third-party investor capital, within its range of reinsurance joint-venture vehicles and ILS funds, the news will no doubt be of interest to institutional investors focused on environmental, social and governance (ESG) issues.

The partnership, between RenRe and Moody’s, is the first time Moody’s sustainability capabilities are being applied to a reinsurer’s treaty books.

By benchmarking the environmental impact of risks within RenRe’s underwriting portfolio, the technology will provide a transparent benchmarking approach across counterparties and diverse risk classes, the companies said.

Cathal Carr, SVP, Chief Underwriting Officer – Europe, and Global Head of Climate & Sustainability Underwriting Strategy at RenaissanceRe, commented, “As managers of complex risks, the reinsurance industry is uniquely positioned to protect communities and businesses against the impact of a changing climate.

“RenaissanceRe is proud to work with a leading global integrated risk assessment firm like Moody’s and looks forward to bringing our 30 years of climate expertise to such an important focus area for the industry. The framework will help us support our clients in navigating the journey to a lower carbon economy, while advancing our opportunities to provide risk-taking capacity through this transition.”

“As the insurance industry faces new sustainability challenges, such as climate-driven physical risks and the transition to a low-carbon economy, there is an increasing need for data, models, and analytics to assess the associated risks in their underwriting portfolios,” Stephen Tulenko, President of Moody’s Analytics added. “We are excited about collaborating with an innovative industry expert like RenaissanceRe as we enhance our underwriting solutions and provide a consistent view of risk across the value chain.”

RenRe said in a further statement, “This collaboration brings together our industry-leading underwriting and climate expertise with Moody’s data, models and analytics to help us support and provide risk-taking capacity to our customers as they navigate the transition to a lower carbon economy.”

With ESG remaining a hot topic for investors in ILS, particularly European institutional allocators such as pensions, the fact companies in reinsurance and ILS are increasingly applying scoring and benchmarking methodologies against the risks in their portfolios can help to increase awareness of them, and raise appetites to invest in them.

ESG investing and the opportunities it presents are a growing focus for the insurance-linked securities (ILS) market. Read more of our insights on this topic here.