Insurance Industry and Sustainability Preferences: Contracts and Products

The chapter deals with the impact of the sustainability factors on the Italian insurance products market. Once the relevance of insurance companies for the growing-up of an ESG stewardship market has been highlighted, the chapter envisages contractual solutions that are able to promote sustainability objectives in the non-life sector, by means of derogations from the legal framework laid down in the Italian Civil Code. The placement of insurance products has then to be focused on, and this under a twofold point of view: (a) there are tools that concern the individual relationship between the insurer and the customer, and in this regard it is a matter of understanding the effects of the sustainability assessments in the field of sales with advice, sales without advice and execution-only regime; (b) there are tools that concern the insurance offer at a stage preceding the relationship with the individual customer, thus the very packaging of the product, in the perspective of developing a distribution strategy aimed at promoting ESG preferences. In the latter regard, the so-called insurance of large risks will be considered: product oversight and governance will be seen not only as a duty of manufacturers and distributors to protect the weaker contractual party, but also as an opportunity, left to the discretion of the manufacturer, to promote ESG objectives. The chapter analyses therefore the influence tools that the manufacturer may implement in the relationships with the distributor, and also the subsequent repercussions on the internal corporate governance policies of the insurance company.