In the insurance sector, the ability to identify, assess and manage risks is a key element for a Company’s competitive ability and long-term sustainability. Unipol, in line with the positions of institutions and regulators, believes that the integration of risks associated with environmental, social and corporate governance factors is necessary for an increasingly improved understanding of the context in which the Group operates, a more conscious risk underwriting and, ultimately, a greater ability to respond to the needs of customers and of the community.
For this reason, the Group’s Risk Management Policy, a key document that lays down the Unipol Group’s risk management strategies and objectives, contains a specific section on “Sustainability Risks”, where it defines, identifies and describes the main methods to manage them.
Sustainability-related risks are defined as environmental, social or governance events or conditions of an uncertain nature that, if they occur, could cause a relevant adverse effect, effective or potential, on the value of the investment or on the value of the liability, on the Company’s strategy or business model, or on its ability to achieve its objectives and to create value, and that could consequently influence the undertaking and its commercial partners’ decisions on sustainability matters.
Within the ERM (Enterprise Risk Management) Framework, the Group identifies and controls sustainability-related risk factors:
1
in terms of impact on underwriting risks
2
in connection with investment risks
3
with a view to focusing emerging risks on environmental, social and governance issues
4
in terms of the impact that could derive at the reputation risk level
The Group has structured sustainability-related risk controls within the individual categories of current risk, so as to manage such risks at all stages of the value-creation process and to mitigate the onset of any reputation risk associated with such risks. These measures are also designed to prevent the concentration of exposures to areas and/or sectors that are significantly exposed to sustainability-related risks. In this context, particular consideration is given to climate change and its impacts on underwriting and investment activities.
The safeguards designed to prevent the onset of sustainability-related risks and to mitigate their effects are defined in the Management Policies of individual risk categories, where appropriate, such as, inter alia:
- Investment policy;
- Underwriting Policies relating to the Non-Life business and the Life business;
- Reserving Policies relating to the Non-Life business and the Life business;
- Outsourcing and supplier selection Policy;
- Reinsurance and other risk mitigation techniques Policy;
- Policy on the protection and valorisation of personal data.
