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June 30, 2022


  • Insurers from the Asia-Pacific region are fast catching up with their European and American counterparts on the environmental, social, and governance (ESG) agenda.
  • Because of climate change, environmental concerns outweigh the social and governance aspects of ESG for APAC insurers.
  • Digital technologies such as artificial intelligence (AI) and the internet of things (IoT) have become pivotal to the growth of APAC insurers.


The insurance industry has recently emerged as a dominating player for institutionalizing sustainability efforts, due to its magnitude and its contribution to communities and economic growth.

With environmental, social, and governance (ESG) initiatives topping the agenda for insurers, companies in Europe and the US have been leading the adoption for a long time now, whereas Asia-Pacific (APAC) insurers are catching up faster than anticipated. According to recent studies, a large percentage of investors in APAC increased their ESG investments in response to COVID-19.

Environmental pillar

Climate change is one of the biggest challenges for APAC insurers, so, environmental concerns remain a top priority instead of the social and governance pillars of ESG.

Typhoons, bushfires, droughts, and floods have become more frequent in the APAC region, leading to increased mortality and property losses. As a result of such risks, the economic recovery of communities could worsen and end in market failure. 

That said, it is comforting to see how institutions like AIG, Allianz, AXA, and AVIVA act as catalysts for positive change by committing to sustainability advancements, net-zero carbon emissions, and renewable energy transitions. Environmental initiatives are powered by technologies like geospatial data insights and satellite imagery used to monitor carbon footprint and reduce emissions over time. Also, innovative products like Energetic Insurance’s credit insurance for renewable energy highlight the opportunities for increased access to capital for commercial renewable energy projects. 

According to studies, Malaysia is leading the way in the use of internet of things (IoT) for agriculture in the APAC region. IoT has tremendous benefits, from monitoring appliance usage in homes to controlling massive wind farms globally. Installing sensor-based flood abatement or gas leakage detectors may cost a couple of dollars per sensor a year but saves millions of dollars in actuarial outlook.

Social pillar

Going forward, the number of senior citizens is set to rise drastically in APAC, which will make social risks a greater concern for life and health insurers.

APAC insurers are investing in technology innovation such as care robots, wearables that monitor health conditions, and occupational health and safety policies that prevent and minimize fatalities and injuries. Besides, cybersecurity has increasingly become central for all types of insurers. They are focused on expanding cybersecurity insurance offerings, as policies must contain austere per-occurrence deductibles and rigorous demands on the cybersecurity protection of insureds. This will keep premiums affordable while encouraging insureds to mitigate their risks.

Examples of insurtechs in APAC addressing the social aspect of the ESG agenda are many. To illustrate, firms in Southeast Asia have introduced artificial intelligence (AI)-powered microinsurance platforms aimed at the low-income population and a new generation of digital natives. 

Besides, in India, firms that are not traditional insurance players also offer insurance. For example, AI-enabled mental health applications have partnered with insurance providers to subsidize the cost of their services to their users. Such an insurance service not only strengthens the insurer’s existing support network but also enables early intervention to high-risk groups.

Governance pillar

APAC insurers are increasingly appointing chief sustainability officers (CSOs) to take accountability of ESG initiatives and outcomes.

They oversee not just diversity and inclusion in their workforce and business practices but also ensure that the ESG reporting guidelines are adhered to. 

Such a focus ensures robust corporate governance practices and high-quality decision-making. Besides, insurers are focused on making the industry more inclusive for women through set ups such as the Women in Insurance Initiative (WII).

With regard to the governance aspect of ESG, financial regulatory bodies in Asia such as the Hong Kong Monetary Authority, the Monetary Authority of Singapore (MAS), and the Financial Services Commission (FSC) of South Korea have introduced sustainability reporting guidelines. This is aimed at enhancing corporate governance and transparency for listed companies, including insurance and reinsurance firms.

Another core aspect of the ESG agenda is transparency. An increasing number of insurtechs now provide an insurance comparison platform to check whether premiums have been invested in sustainable projects. This assures customers of their insurance investments.

Way forward

Broadly, APAC insurers face cost pressures for sustainable initiative investments.

Insurers have put in significant effort to understand current local and global regulations and reporting requirements, executive alignment on sustainability, data, and infrastructure prerequisites. We believe embracing innovation, adopting digital technologies, and collaborating with ecosystem partners accelerate and realize ESG commitments not just for the entire insurance industry but also for the economy, in a reliable manner.


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For more information on TCS' Banking, Financial Services, and Insurance (BFSI) unit, visit,, and

Domain Consultant, Asia-Pacific, Insurance

Subha is an insurance domain consultant, part of the New Growth Markets business unit focusing on Asia-Pacific. She works closely with the TCS Industry Advisory Group to serve business growth. She has over 17 years of experience in IT consulting, advisory, and has worked with several of TCS’ global insurance customers. Her areas of focus include new business and underwriting excellence, speed to market, product development, business process re-engineering, and core system transformation. 


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