ABSTRACT
Climate change, environmental pollution as well as social problems are major challenges for sustainable development. They also affect the insurance sector and have a significant impact on it in two ways. First, insurance companies have an important role as risk hedgers, ensuring the conditions for business continuity. Secondly, insurance companies are entities that have to adapt to new challenges like all market players. These include, in particular, climate change and its impact on insured risks (e.g., increased mortality due to climate change, catastrophic risks, etc.), which necessitate a different approach to risk assessment and management. Among other things, ESG (Environmental and Social Governance) risks must be taken into account within the business. This requires profound changes, the development of innovative solutions in line with sustainable development, and engaging in investments with a positive social and environmental impact.
The aim of the chapter is answering the following questions:
What is the role of insurance companies in achieving sustainability?
Are insurance markets responding to social and environmental challenges?
Do social and environmental changes affect the development of insurance markets in the EU-15?
The chapter reviews the literature on the impact of sustainable development on the insurance market and analyses the legal acts in force, regulating sustainable development issues at the European Union level, and conducts own research to assess the impact of selected environmental and social changes on the development of insurance markets of the EU-15 countries.
The study covered the period 2010–2020. Statistical and econometric methods were used in the own research. Statistica 13 and Gretl software were used to compile the results of the own research.
The self-study conducted allowed positive verification of the research hypothesis: is there a statistically significant impact on the environmental and social aspects of sustainability development on the insurance market.
