QBE Insurance Australia has announced its commitment of a minimum AU$100 million (around NZ$109 million) towards impact investing as part of a “global-first initiative” for the insurance industry.
In a release, QBE said it will invest a proportion of its 5.2 million policy premiums into socially progressive projects in Australia and around the world, such as affordable housing, renewable energy and healthcare.
According to QBE, the Premiums4Good initiative supports investments that create positive social and environmental change, at no additional cost to the policyholder. Historically, insurance businesses have focused on investing premiums with financial returns as a key consideration, without necessarily focusing on the social impact of the investments, it said.
“In Australia, QBE will initially invest a minimum of AU$100 million towards assets with an additional social or environmental benefit in 2018,” QBE explained. “The amount is expected to increase in future years.”
“The opportunities for the industry are significant with Australian insurance companies’ collective pool of premiums totalling more than AU$45 billion,” it added.
QBE Australia & New Zealand CEO Vivek Bhatia said Premiums4Good gives their customers and partners comfort that they are helping drive positive change.
“Through Premiums4Good, we will set aside a growing pool of premiums to achieve both financial and socially responsible returns,” he said.
QBE also quoted the latest Responsible Investment Association Australasia (RIAA) Report, which says 92% of Australians expect their superannuation and other investments to be invested responsibly and ethically, while 7 out of 10 Australians would rather invest in a responsible super fund.
The insurer said it expects Premiums4Good to appeal particularly to millennial Australians (aged under 35), who, according to the RIAA Report, would consider switching their investments to another provider if the company of their current investment engaged in activities inconsistent with their values.
Rosemary Addis, the Australian Advisory Board on Impact Investing chairperson, said: “QBE’s launch of Premiums4Good signifies a progressive step for the insurance industry.
“The initiative highlights the growing trend of institutions making investment choices based on their impact on society as well as financial performance,” she added.
Examples of investments QBE is including through the Premiums4Good initiative include:
- Social impact bonds (SIBs) – The Benevolent Society Social Benefit Bond, which supports up to 400 families in Australia that are at risk of having their children removed and placed into out-of-home care.
- Green bonds – Investment into projects with environmental benefits such as renewable energy, waste management and water conservation.