General Insurance

Integrating ESG into Underwriting

Underwriting excellence is a key pillar of our business strategy. This empowers our underwriters to decrease volatility and improve performance by enhancing risk selection, applying underwriting best practices and building robust monitoring standards.  A key aspect of underwriting excellence includes integrating ESG considerations into our underwriting practices to inform decision-making and help ensure our underwriting is aligned with our other ESG efforts.

We have developed an ESG underwriting framework for General Insurance and are in the process of implementing it across the organization. The framework defines our company-wide approach for consistently integrating ESG across all product lines and is based on four key elements:

1. Screening

Identifying and mapping Sensitive Business Areas (SBAs) against industry sector codes to determine if an escalated ESG review is necessary. These reviews consider AIG’s ESG industry ratings as an input.

2. Data Management

Collecting and storing data in a central and secure location to enable our underwriting team full visibility into ESG considerations that are essential factors allowing best in class modeling when working with our clients to mitigate risks they face.

3. Client Engagement

Engaging with our clients in open dialogue to understand their goals, how those goals align with AIG, and how we can support our clients’ pursuit of those goals.

4. Governance

Having a robust governance structure in place to ensure we are meeting our commitments and monitoring our underwriting.

AIG's ESG Ratings

AIG Enterprise Risk Management (ERM) has developed proprietary industry-level ESG risk ratings for the Standard Industrial Classification (SIC) codes to provide a holistic view of risk that transverses all types of insurance business written and assets held by AIG. 

These industries are scored based on an evaluation of ESG performance, trend analysis and ESG reputation of each industry.  

These ratings are then used as an input in the ESG underwriting framework screening process and are also an important input to climate risk plans, as they aid in the application of disciplined risk parameters, identify high-risk lines of business, support responding to regulatory requirements, guide stress testing and provide a link between liabilities and investments.