Industry facing sustainability conundrum

The claims industry is walking a tightrope between environmental targets on one side and cost implications on the other.

While the general consensus is that the industry has a pivotal role to play in helping the UK reach net zero, and a social and corporate responsibility to support that ambition, this is pitted against the very real practicalities of business.

Laura Lazarus, Supply Chains Lead, Property, Aviva, said, “We’re operating in a price-sensitive market and to be more sustainable means to be more expensive.”

However, she highlighted that the stringent nature of green targets means everyone has to address the issue sooner rather than later.

She continued, “It’s going to be tough, but insurers are already signing up to some pretty punchy targets. We won’t achieve them by ourselves though and all insurers will have to look at the carbon footprint of their supply chains. At Aviva, we’ve already started to survey some suppliers to get a sense of where they’re at, and there are some real differences, so we know it’s going to be a massive challenge.”


However, she believes that by taking onboard the lessons of collaboration learned during Covid-19, the industry has a realistic chance of succeeding.

Laura continued, “What we’re trying to achieve is huge. It’s all very well saying we’re going to be net zero by 2030, but reaching that goal will require a lot of small steps. There are some quick wins out there so we need to be clear what our ambitions are in the short-term.”

Laura was speaking during a panel debate at the I Love Claims Home & Property Claims Conference, which took place at the CBS Arena, Coventry, on 11 November 2021.

She was joined on stage by Jeremy Sykes, MD, Polygon UK; Neil Stothert, MD, RSK RAW; and Mike Lawson, CEO, Property Risk Inspection.


Neil agreed that suppliers will have a direct impact on an insurer’s ability to meet sustainability targets, but said he was concerned that much of the burden would simply be pushed down the chain, irrespective of the fact that the market is still lagging some way behind.

He said, “As an industry we’re still installing oil boilers right now, and if a gas boiler needs replacing they’re also being replaced, so we are miles away from where we need to be. We recognise that legislation is changing and the insurance industry is making pledges to get to net zero, but everyone knows it will come down to the supply chain and I’m worried insurers will simply turn around to suppliers and say you need to be more environmental so we can meet our targets. In an industry where the cheapest supplier always wins, that makes it very challenging.”

Jeremy agreed, suggesting that the only way the sector could achieve its sustainability targets was through a sharp rise in premiums, with profits then filtering down to suppliers to fund a greener transition. He insisted there was room to move premiums, pointing to ABI figures that found the average building and contents policy in the UK is £312 compared to €1,200 in Germany and €1,000 throughout in Scandinavia.


However, the costs associated with becoming more sustainable can be mitigated by the introduction of better processes.

Jeremy said, “We have multiple hand-offs in every claim, and that’s all cost. If we have a better, joined-up process then you can eliminate a lot of cost while also reducing the amount of carbon in the system. But it also takes a bit of bravery to make big, structural change like that. Is this industry known for taking risks? Probably not. But we have to do something different.”

The need to change is about far more than simply meeting government targets though, with the climate crisis now at a critical juncture.


The implications of climate change are already being felt with more severe weather occurring more often in recent years, and that trend will only accelerate at the planet warms up.

Mike said, “The UK is a part of the planet that will be buffeted by the worst of this. The effects will come in ways we never understood. We’re already seeing it in the slow-moving storm fronts and monsoon-like rainfall. That’s going to intensify and to be honest I don’t think we’re taking this seriously enough.

“Across the world this will devastate supply chains and markets, but where is our contingency planning? We need an industry-wide solution to how we’re going to manage these challenges, because they are coming down the tracks.”

ILC will address the environmental challenges facing the sector in a dedicated conference next spring, with the Environmental and Sustainability Specialist Conference taking place on 31 March 2022.

ILC’s Home & Property Claims Conference 2021 was supported by headline sponsor Synergy; Gold Sponsors – Catalyst, Dasa, LexisNexis, Perfect Group, Polygon and Sedgwick; Silver Sponsors – Belfor, Bdeo, CRDN, Farcroft and Gelder; and ILC Corporate Partners – Carpenters Group, CoreLogic, ICAB, ICAB Pod, and Innovation Group.


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