QBE has committed a minimum A$100 million towards impact investing as part of a global-first initiative and will now invest a proportion of its 5.2 million policy premiums into socially progressive projects in Australia and around the world.
These projects will include various schemes in affordable housing, renewable energy and healthcare. The initiative, called Premiums4Good, marks a global first for the insurance industry and supports investments that create positive social and environmental change, at no additional cost to the policyholder.
QBE Australia & New Zealand CEO Vivek Bhatia said the insurance industry can drive positive social and environmental change while generating acceptable financial returns for investors.
“Research shows Australians are increasingly mindful about what they invest in. We look at an investment, we want a return, but know investments can do more. And fortunately, with more social and environmental investments available, insurance businesses can do both.
“Premiums4Good invests for social, environmental and financial benefit.
“At the same time this initiative gives our customers and partners comfort they’re 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.
In Australia, QBE will initially invest a minimum of A$100 million towards assets with an additional social or environmental benefit in 2018. 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 A$45 billion.
The Australian Advisory Board on Impact Investing Chairperson Rosemary Addis welcomed the announcement.
“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 said.
According to the latest Responsible Investment Association Australasia (RIAA) Report, 92 per cent 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 insurance initiative is expected to appeal particularly to millennial Australians (aged under 35). According to the RIAA Report, millennials in Australia would consider switching their investments to another provider if their current investment engaged in activities inconsistent with their values.