Sustainable insurance: Your path to responsible cover and a greener future
07.05.25
8
Minutes
Katrin Straub
Managing Director at nextsure
Are you looking for insurance cover that does more than just settle claims? A sustainable insurer invests your premiums responsibly and actively promotes a better future. Find out how to choose the right policy and which criteria really matter.
The topic in brief and concise terms
Sustainable insurers take environmental, social and governance criteria (ESG) into account in their capital investments and operations.
By choosing a sustainable policy, you can support environmental protection projects and invest in ethically responsible areas.
Look for transparency, specific sustainability targets from the insurer, and recognised seals to avoid greenwashing.
Understanding sustainable insurance: More than just a trend
Sustainable insurance combines traditional risk protection with ethical investment criteria. It takes environmental, social and governance (ESG) factors into account. More than 60 per cent of customers prefer policies with ecological or social added value. This development shows a growing awareness of responsible consumption.
There is no single, universally accepted definition of sustainable insurance. However, many providers are guided by ESG criteria. These help assess investments according to sustainability aspects. For example, your premiums do not flow into coal power or weapons production.
Insurers play a threefold role: as risk carriers, risk managers and investors. With assets under management of around €1.8 trillion, German insurers have considerable influence. The industry is committed to the UN Sustainable Development Goals (SDGs). This underlines its importance for a future-proof economy.
Demand for green policies is rising steadily, especially among younger generations. This shift requires providers to offer transparent and credible products. Comprehensive advice helps identify the right sustainable insurance. The following section explains the specific benefits for you and the environment.
Secure benefits: Benefit from green insurance solutions
Taking out sustainable insurance offers you tangible benefits. You actively support environmental protection projects with your policy. Many insurers, for example, plant one tree for each new policy. This is a direct contribution to climate protection.
Your insurance contributions are invested in environmentally friendly projects and companies. This often excludes investments in fossil fuels. Instead, capital flows into renewable energy or social housing projects. Your money has a doubly positive effect.
Sustainable policies often also encourage mindful behaviour in everyday life. Some household contents insurance policies support the purchase of energy-saving appliances with grants of up to 100 euros. Motor insurance policies can include discounts for electric vehicles of five to ten per cent.
Some providers offer additional benefits in sustainable claims handling. This can mean covering additional costs for ecological building materials after water damage. This means your home is not only repaired, but also made more environmentally friendly. Taking sustainability criteria into account is therefore becoming increasingly important.
Decoding ESG criteria: What should you look for when choosing?
The ESG criteria are at the heart of sustainable insurance. "E" stands for Environment, "S" for Social and "G" for Governance. Insurers use these to assess their investments and business practices. Look out for transparent reporting on this.
In the environmental area (E), it is about more than just reducing CO2. Insurers, for example, invest in renewable energy and avoid companies that contribute to environmental destruction. GDV members are aiming to offset their Scope 1 and 2 emissions by 2025.
Social aspects (S) include fair working conditions and social commitment. This includes promoting diversity within their own company. Investments in social projects or fair trade also fall under this. Transparency about these activities is a good sign.
Good governance (G) means ethical conduct and anti-corruption. This also includes robust risk management for sustainability risks. BaFin published a memorandum on this as early as 2019. A detailed analysis of the providers is advisable here. EU regulations are further tightening these requirements.
Regulatory framework: What the EU Taxonomy and others mean
The EU is driving sustainability in the financial sector forward with several regulations. The EU Taxonomy Regulation is a key building block. It defines which economic activities are considered environmentally sustainable. Six environmental objectives are decisive here, including climate protection and climate change adaptation.
Insurance companies must demonstrate that their products make a "substantial contribution" to at least one environmental objective. At the same time, they must not significantly impair any other objectives ("Do No Significant Harm" principle). Social minimum standards, such as human rights, must also be observed.
The Sustainable Finance Disclosure Regulation (SFDR) requires insurers to disclose ESG information. This applies both at product level and to the company itself. Customers should therefore be able to assess the sustainability of financial products more easily. Pay attention to these disclosures when making your choice.
In addition, the Corporate Sustainability Reporting Directive (CSRD) requires more comprehensive sustainability reporting. In Germany, this is implemented through the CSR-RUG. BaFin monitors compliance and has defined sustainability as a supervisory priority. These regulations significantly increase transparency for consumers. The next step is selecting suitable products.
Find green policies: Practical tips for your sustainable insurance
Finding the right sustainable insurance requires a bit of research. Start by analysing your personal sustainability goals. Which aspects are especially important to you? Is the main focus on climate protection or also on social justice?
Review the insurers’ sustainability reports. Many companies publish details of their ESG strategies and capital investments. Look for specific goals and how they are implemented. Some insurers have their sustainability assessed by independent institutes. The "ECOreporter seal" is one example of such an award.
Look out for the following features in sustainable products:
Capital investment: Are exclusions (e.g. coal, armaments) and positive criteria (e.g. renewable energy) clearly specified? At least 75 percent of the capital investments should be sustainable.
Claims settlement: Are there additional benefits for sustainable repairs or replacement purchases? Additional benefits of up to 20 percent are possible here.
Contribution transparency: Is it disclosed how and where your contributions are invested?
Additional benefits: Are social or ecological projects directly supported, e.g. tree-planting campaigns per policy?
Comparison portals can provide an initial overview, but not all of them take sustainability aspects into account in depth. Personal advice from experts such as nextsure can help separate the wheat from the chaff. This ensures that your insurance really matches your values. The range of products is constantly growing.
Product diversity in focus: From sustainable liability insurance to retirement planning
Sustainable options are now available in almost all insurance sectors. In car insurance, some plans promote electric mobility through premium discounts of up to ten per cent. Repairs using used parts or in certified workshops are also supported.
In the home and living area, sustainable buildings and contents insurance often offers additional benefits. This can include cover for energy-efficient household appliances up to €250 or the use of eco-friendly insulation materials in repairs. Photovoltaic insurance is, by its very nature, a contribution to the energy transition.
There are also private liability insurance policies with a green focus. These can, for example, support waste reduction projects with one euro per policy. Pet owner liability insurance policies can offer similar models for animal welfare projects. Every policy can therefore make a small difference.
For retirement provision and disability insurance, sustainable capital investment is crucial. Here you should check carefully which exclusion criteria apply and which sectors are invested in. Unit-linked products often offer a selection of sustainable ETFs or funds. Sustainable retirement provision secures your future and that of the planet. Choosing the right one requires care.
Not every product advertised as “green” does what it promises. Look for clear, verifiable criteria and transparency. Vague claims such as “we invest in an environmentally friendly way” are not enough. Ask for specific investment principles and exclusion lists. At least 90 per cent of investments should meet the criteria.
Our expert tip: Check whether the insurer is a member of initiatives such as the Principles for Sustainable Insurance (PSI) or the Net-Zero Asset Owner Alliance (NZAOA). This shows a serious commitment. However, membership alone is no guarantee; implementation is what counts.
Some labels can provide guidance. The “Native Rating” assesses non-life insurance based on more than 300 indicators. The Greensurance Stiftung awards this label. The ECOreporter label also examines insurers for sustainability. However, remain critical, as there are many different labels.
BaFin requires insurers to take sustainability risks into account in risk management. This is an important step, but the extent of implementation varies. A thorough review of the company philosophy and the specific measures is essential. This is how you can ensure that your sustainable insurance makes a real contribution. The next section summarises the key points.
Shaping the future: your contribution through sustainable insurance
Choosing sustainable insurance is an active contribution to a better future. You steer capital flows in a responsible direction. Each policy thus supports the shift towards a more environmentally friendly and socially responsible economy. More than one million Germans have already opted for sustainable investments.
Insurers face the challenge of adapting their business models. EU regulations provide a framework for this, but the initiative of companies is decisive. By 2030, insurers in the GDV want to significantly reduce their CO2 emissions in portfolios. Your conscious choices accelerate this process.
By choosing sustainable insurance, you show that ethical aspects matter to you. This sends a strong signal to the market. It promotes transparency and responsible action across the industry. The number of sustainable insurance products grows by around 15 per cent each year.
If you would like to review and optimise your insurance situation, we will be happy to help. An individual risk analysis will help you find the right sustainable cover. Take the opportunity to align your financial planning with your values.
More useful links
The German Insurance Association (GDV) provides comprehensive information on sustainability in the insurance industry.
The German Insurance Association (GDV) provides its Sustainability Report 2023, which gives detailed insights into the industry's sustainability activities and goals.
The German Environment Agency provides information on the sustainable financial system and its importance for environmental protection and the transformation of the economy.
The Federal Statistical Office provides official data and indicators on sustainability in Germany, reflecting social and environmental developments.
The Federal Ministry of Finance publishes the German Sustainable Finance Strategy, which sets out the framework for sustainable finance in Germany.
The Deutsche Bundesbank explains its role and activities in the area of Sustainable Finance, particularly in the context of banking supervision.
PwC Strategy& offers an analysis of the relevance of ESG factors in the insurance industry and their impact on business models.
FAQ
What are ESG criteria in insurance?
ESG stands for Environment, Social and Governance. Insurers that apply ESG criteria invest, for example, in environmental protection, pay attention to fair working conditions and act transparently and ethically.
Does every sustainable insurer invest the same way?
No, the investment strategies can differ. Some insurers rely on strict exclusion criteria (e.g. no investments in fossil fuels or armaments), while others use "Best-in-Class" approaches or thematic investments (e.g. renewable energy).
Are sustainable insurance policies more expensive?
Not necessarily. Premiums depend on many factors. Sometimes sustainable measures can even lead to savings in the event of a claim, or there may be discounts for environmentally friendly behaviour. A detailed comparison is always worthwhile.
What role does the EU taxonomy play in sustainable insurance?
The EU Taxonomy is a classification system that determines which economic activities are considered environmentally sustainable. Insurers must disclose the extent to which their products and investments meet these criteria, which increases transparency.
Can I switch my existing contracts to sustainable options?
That depends on the provider and contract. Sometimes a switch to a sustainable tariff is possible, in other cases, taking out a new policy may make more sense. Speak to your adviser about it or let us at nextsure advise you.
How does nextsure help with choosing a sustainable insurance policy?
At nextsure, we analyse your individual situation and your sustainability preferences. We help you find transparent and credible offers that align with your values and provide comprehensive protection. Request your personalised risk analysis now.
