Perspectives

Insurance CSRD Benchmark

We captured the progress of 16 re/insurers’ CSRD programmes

April 2024

ESG is changing how re/insurers think about their business. This is being accelerated by the introduction of the Corporate Sustainability Reporting Directive (CSRD), a cornerstone of the EU Green Deal.

CSRD is significantly more comprehensive than any other regulations. And it is more than a step change in reporting: it is a transformative opportunity to embed sustainability into the business and drive long-term value creation.

We’ve conducted a CSRD maturity benchmark based on data from 16 re/insurers as of January 2024 to get a pulse of the market.


Re/insurers are at an inflection point in their CSRD journey

11 months from CSRD go-live for FY24 reporters, the re/insurance industry shows a low-to-medium level of readiness on average. Most re/insurers are still in the assessment phase, with only a third having completed a CSRD-aligned double materiality assessment (DMA) and a gap analysis. In some cases, IFRS 17 implementation and remediation was prioritised until recently. German head-quartered entities in the benchmark are the most mature in their CSRD journey, whereas those with non-EU headquarters were much further behind.

Most FY24 reporters plan to apply all transition reliefs available and to disregard CSRD voluntary disclosures and are actively implementing tactical solutions for the first year of reporting. Strategic reporting solutions will like re-use and extend existing data and technology architecture and incorporate "best of breed" point solutions where required.


Getting the governance around sustainability right remains highly topical

Insurers have been evolving their governance around sustainability over the past few years and establishing the right set up to drive tangible ESG outcomes remains a challenge. Especially, we expect sustainability to drive a massive shift for the CFO function, which will likely manage more non-financial data than financial data in the coming years. 76% of the entities in the benchmark that have defined their CSRD governance have assigned CSRD accountability to the CFO (53%) or jointly to the CFO and the CSO (23%).

Most re/insurers have established a central team of up to 10 FTEs, supplemented by up to 20 external FTEs, integrated within a larger, cross-functional team of 8-40 FTEs. For all non-EU headquartered entities, the group is either enabling or leading the local CSRD implementation to ensure alignment, avoid any unintended precedent ahead of group implementation, and mutualise the effort.


There is some variability in the topics deemed material

Re/insurers deem a range of 3 to 8 topics as material, with a median of 5. Most deem E1 Climate change, S1 Own workforce, S4 Consumers and end-users and G1 Business conduct material. E4 Biodiversity and ecosystem is also emerging as material in many instances.


The environmental disclosures require overall the highest effort, followed by social disclosures

E1 requires a significant uplift in granularity of disclosures even for leaders in climate disclosures, and will involve complex calculations.

Many are in the process of forming a 1.5°C aligned transition plan. Most local EU subsidiaries of non-EU undertakings plan to disclose for first year of reporting that they don’t have one in place, and some non-EU groups are debating whether they will develop 1.5°C aligned transition plan.

Most don’t plan to disclose insurance associated emissions (IAEs) the first year given the extensive use of proxies and expert judgment in a limited assurance context, the low coverage of the overall portfolio that may be covered by a PCAF standard, and transition relief for disclosures relating to the value chain. There is also a debate on whether IAEs are required to be disclosed by CSRD in the first place and all insurers have an eye on the insurance-specific reporting standard expected to be released in summer 2027.


Looking ahead

We will continue to monitor the re/insurance industry CSRD readiness. If you are interested in participating to our next survey, or in comparing notes on sustainability reporting, how to best navigate the reporting requirements, and how to embed sustainability in your operating model, please do not hesitate to contact us and/or your primary contact at Deloitte.
 

Did you find this useful?