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Introduction

Choosing insurance companies is a bit of a lottery. They might be offering the best deal today, but who knows what will happen in the future? Increased risk of natural disasters such as flooding could affect the cover these companies offer. Stay ahead of the main players by keeping track of their shares and where they choose to invest, as this is a good indicator as to the ethical standard of their policies.

Keyword-ResearchLook out for our new sector-specific Ethical Accreditation certification marks which now cover over 15 different consumer product sectors. These are additional to our original Ethical Company mark that features on the packaging of over 100 million consumer products every year.

Ethical insurance

A key question for individuals is which shares the money is invested in. According to Friends of the Earth, ‘the fate of the global environment is in large part under [institutional investors’] control, and yours too – because it is your money and you are their client’. However, the Ethical Money partnership says that ‘no insurer has an “ethical investment” policy whereby they avoid investing in particular types of company’.

Campaigners have become increasingly impatient over unethical corporate activities and they are learning how to put pressure on insurance companies as shareholders. One way to make this pressure work is to keep people aware of what their insurers are investing in. Campaigners ask the insurance companies to use their own power as shareholders to vote or create pressure for more ethical or environmentally sound behaviour by the target company. By working together, campaigners and individuals can push these companies to change their policies.

Plummeting shares

As share prices plummeted in 2001 and 2002, many insurance companies went through a difficult time and saw their assets devalued, as their own investments in stocks, shares and property markets began to mark up losses. Premiums started to rise and companies became much more careful about the risks they were prepared to cover. In the UK, flood cover was withdrawn from a lot of homes that were deemed to be at risk.

So-called natural disasters have required insurers to make huge pay-outs, the rate of which has been doubling every decade. One report in 2002 warned that more frequent natural disasters in future could bring insurers, re-insurers and banks ‘to the point of impaired viability or even insolvency’. The insurance companies usually offset their potential liabilities by trading some of the premium (like a bookie ‘off-setting’ a large bet with another bookie) with a re-insurance company. Many of these companies have now become involved in the UN Environment Programme’s Insurance Industry Initiative, which commits them to working together to address issues such as pollution reduction, efficient use of resources and climate change – or in other words to try to work out more sustainable development policies around the world.

Ethical insurance

There are some insurers who can be regarded as ‘ethical specialists’. Naturesave places 10 per cent of premiums into a fund (The Naturesave Trust) which finances projects that benefit the environment. The company offers a free environmental performance review to businesses and charities to help spread awareness of sustainable development.

The ETA (Environmental Transport Association) aims to bring about positive changes in Britain’s travel habits by raising awareness about the impact of excessive car use. It provides travel and bicycle insurance as well as breakdown cover for cars and mobility scooters. See www.eta.co.uk and www.etatrust.org.uk for further details.

For those seeking ethical pet insurance, Animal Friends dedicates its profits to the care of animals and their environment (www.animalfriends.org.uk).

Ethical Comparison – Insurance Rankings Detailed Table


Keyword-Research
Buy our detailed Ethical Research Reports. See the findings behind companies’ ethical ratings, as featured in The Good Shopping Guide. Several different product sectors available covering hundreds of consumer brands.

We have created ethical comparison rankings for the following brands, based on the activities of the company group (see above tables): ETA, CIS, Naturesave, Ansvar, Ecclesiastical, Royal London, Animal Friends, Friends Provident, More Th>n, Petsurance, Guardian Financial Services, Scottish Equitable, Admiral, BUPA Health Assurance, Eagle Star, Elephant, Zurich, E-Sure, Legal & General, Liverpool Victoria, Standard Life, Swinton, AXA, Churchill, Cornhill Direct, Direct Line, First Direct, NIG, Pruhealth, AVIVA, Barclays, Clerical Medical, Halifax, Scottish Windows.

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