Half of Asia Pacific insurers yet to adopt net zero plans

Half of insurers in the Asia Pacific region have not yet started to integrate net zero goals into their investment strategies, with data quality and investment management being major roadblocks.

Data quality remained the largest integration barrier for both ESG and net-zero, followed by investment management, according to the research from asset manager Abrdn and Hong Kong-based financial services firm Quinlan & Associates.

The survey did find, however, that 70% of APAC insurers have either already integrated wider ESG concerns into their investment strategies or are in the progress of doing so.

An average of 62% of APAC insurers surveyed believed local ESG regulations will become stricter in the coming three years, and expectations were particularly high in Australia (77%), Malaysia (72%), and Hong Kong (69%).

Vivian Tang, head of institutional for Asia Pacific at Abrdn, said: “Insurers have specific investment needs. They have to generate sufficient returns to meet their long-term commitments to policyholders, while weighing investment risks against regulatory requirements and the potential for balance-sheet volatility.

“Having extensive experience in working with insurers, Abrdn launched this survey to learn how decision-makers were seeking to optimise their investment portfolio to achieve asset yield, capital efficiency and responsible investment objectives.”

The report surveyed 56 senior executives across 43 insurance companies covering eight markets in the APAC region, including Hong Kong, Singapore, mainland China, Thailand, Taiwan, Malaysia, Australia, and South Korea, looking at key topics including regulatory adoption, ESG, and net zero plans.

Last month, writing for Net Zero Investor, Bao Chiann, vice president of the ICC Court of Arbitration, looked into whether Asia could be the next big battleground for net zero disputes.