Australian insurer QBE confirmed this week that is committing a minimum of $100 million to socially responsible investing in what is being called a world-first initiative for the industry.
Starting yesterday, the firm pledged to invest a proportion of its 5.2 million policy premiums into progressive projects such as affordable housing, renewable energy and healthcare.
“Research shows Australians are increasingly mindful about what they invest in,” said Vivek Bhatia, QBE’s Australia & New Zealand CEO.
According to the latest Responsible Investment Association Australasia (RIAA) Report, 92% of Australians expect their superannuation and other investments to be invested responsibly and ethically.
The same report also found that the majority of consumers would consider changing providers or switching investments if their current fund engaged in activities not consistent with their values.
Millennials felt particularly strongly about the issue with 88% saying they’d consider moving compared to 77% of Gen X respondents and 68% of boomers.
“This initiative gives our customers and partners comfort they’re helping drive positive change,” said Bhatia.
Dubbed Premiums4Good, the initiative supports investments that create positive social and environmental change, at no additional cost to the policyholder.
“We look at an investment, we want a return, but know investments can do more,” said Bhatia. “Fortunately, with more social and environmental investments available, insurance businesses can do both.”
While QBE’s initial socially responsible investment will sit at a minimum of $100 million for 2018, the insurer indicated that it is likely the figure will increase in future years.
Examples of investments QBE is supporting through the Premiums4Good initiative include social impact bonds (SIBs) which allow private investors to provide upfront capital for public projects that deliver social and environmental outcomes.
Premiums4Good investments include The Benevolent Society Social Benefit Bond, supporting up to 400 families in Australia that are at risk of having their children removed and placed into out-of-home care, which is resulting in more children being able to remain safely with their families.
The initiative also covers green bonds, or investments into projects with environmental benefits such as renewable energy, waste management and water conservation such as the World Bank’s IFC Green Bond committed to investing exclusively in renewable energy, energy efficiency and climate-smart projects in developing countries.
