DOI: https://doi.org/10.14710/jil.21.1.125-131

Social and Environmental Risks Integration into Underwriting of Non-Life Insurance: A Review of Sustainable Finance in Indonesia

Sekolah Ilmu Lingkungan, Universitas Indonesia, Indonesia

Received: 28 Mar 2022; Revised: 25 Dec 2022; Accepted: 25 Dec 2022; Available online: 7 Jan 2023; Published: 9 Jan 2023.
Editor(s): Budi Warsito

Citation Format:
Abstract

Regulation of the Financial Services Authority of Indonesia (POJK) Number 51/POJK.03/2017 concerning the Implementation of Sustainable Finance for Financial Services Institutions, Issuers, and Public Companies was officially enacted for the insurance sector as of 1 January 2020 and requires the insurance sector, including the general insurance sector, to carry out the implementation of sustainable finance into its business activities. This study intends to review the extent of the implementation that has been carried out, particularly in relation to the social and environmental risk management principles. Using a literature review, data specifically related to the underwriting process were gathered and analyzed. Results of this study suggested that even though 86% of 44 respondents from the previous research had already confirmed if principles of social and environmental risk management had been implemented at that time, vast majority of the non-life insurers in Indonesia had not yet executed the said integration into the underwriting process. The sustainable finance implemented by Indonesia’s non-life insurance sector is still significantly focused on short-term financial performance rather than the long-term one.

Note: This article has supplementary file(s).

Fulltext View|Download |  common.other
Lampiran
Subject
Type Other
  Download (47KB)    Indexing metadata
Keywords: social and environmental risk management; sustainable finance; general insurance; social responsibility; underwriting process

Article Metrics:

Article Info
Section: Research Article
Language : EN
Recent articles
Penentuan Unit Operasi dan Proses Berdasarkan Kualitas Air Baku di Sungai Landak Kecamatan Kuala Behe Dynamic Model for Food Security to Realize Food Sovereignty: Case Study in Bantul Regency of Yogyakarta Special Region Kontaminan Logam Berat (Pb, Cd, dan Cu) pada Tanah dari Pemupukan Berbasis Jerami Padi More recent articles
Most cited articles
ANALISIS PEMANFAATAN RUANG YANG BERWAWASAN LINGKUNGAN DI KAWASAN PESISIR KOTA TEGAL KEBIJAKAN PENGELOLAAN LINGKUNGAN DI KAWASAN KENDENG UTARA PROVINSI JAWA TENGAH Daya Dukung Jalur Pendakian Bukit Raya Di Taman Nasional Bukit Baka Raya Kalimantan Barat Analisis Tingkat Kenyamanan Di DKI Jakarta Berdasarkan Indeks THI (Temperature Humidity Index) Evaluasi Penerapan Program Adiwiyata Untuk Membentuk Perilaku Peduli Lingkungan di Kalangan Siswa (Kasus: SMA Negeri 9 Tangerang Selatan dan MA Negeri 1 Serpong) More cited articles
  1. Dong, S., Xu, L., McIver, R. (2021). China’s financial sector sustainability and “green finance” disclosures. Sustainability Accounting, Management and Policy Journal Vol. 12 No. 2, pp. 353-384. http://dx.doi.org/10.1108/SAMPJ-10-2018-0273
  2. Engert, S., Rauter, R., & Baumgartner, R. J. (2016). Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of Cleaner Production, 112, 2833-2850. http://dx.doi.org/10.1016/j.jclepro.2015.08.031
  3. Johannsdottir, L. (2014). Transforming the linear insurance business model to a closed-loop insurance model: A case study of Nordic non-life insurers. Journal of Cleaner Production, 83, 341–355. https://doi.org/10.1016/j.jclepro.2014.07.010
  4. Junnila, S. I. (2006). Empirical comparison of process and economic input-output life cycle assessment in service industries. Environmental Science and Technology, 40(22), 7070–7076. https://doi.org/10.1021/es0611902
  5. Maftuchah, I. (2018). Corporate ESG Profile on Performance: Evidence from Indonesian Insurance Industry
  6. Negri, P. (2018). Sustainable Finance and Non-Financial Disclosure: The Impact for the Insurance Industry. Symphonya. Emerging Issues in Management, 1, 110. https://doi.org/10.4468/2018.1.09negri
  7. Nogueira, F. G., Lucena, A. F. P., & Nogueira, R. (2018). Sustainable Insurance Assessment: Towards an Integrative Model. Geneva Papers on Risk and Insurance: Issues and Practice, 43(2), 275–299. https://doi.org/10.1057/s41288-017-0062-3
  8. OECD. (2001). OECD Annual Report 2001. OECD Publishing. https://doi.org/https://doi.org/10.1787/annrep-2001-en
  9. Pawlak, N., Czechowski, P. O., Czuba, T., Oniszczuk-Jastrząbek, A., & Badyda, A. (2018). Business insurances as an element of sustainable development of small and medium enterprises in Poland. SHS Web of Conferences, 57, 01024. https://doi.org/10.1051/shsconf/20185701024
  10. SAL POJK 51 - Keuangan Berkelanjutan, Nomor 51/POJK.03/2017 (2017) (testimony of Otoritas Jasa Keuangan)
  11. SAL Penjelasan POJK 51 - Keuangan Berkelanjutan, Nomor 51/POJK.03/2017 (2017) (testimony of Otoritas Jasa Keuangan)
  12. Samuelson, P. A., & Nordhaus, W. D. (2010). Economics Nineteenth Edition. McGraw-Hill/Irwin. www.mhhe.com
  13. Shrake, S. O. (2012). Evaluating the Environmental Performance of Service Sector Industries. University of Pittsburgh
  14. United Nations Environment Programme Finance Initiative Principles for Sustainable Insurance. (2015). The SDG Industry Matrix: Financial Services. https://www.unepfi.org/psi/sdg-industry-matrix/
  15. United Nations Environment Programme Finance Initiative Principles for Sustainable Insurance. (2019). Underwriting environmental, social and governance risks in non-life insurance business
  16. Vaughan, E. J., & Vaughan, T. M. (2014). Fundamentals of Risk and Insurance. John Wiley & Sons, Inc
  17. Zou, P. X. W., Zhang, G., & Wang, J. (2007). Understanding the key risks in construction projects in China. International Journal of Project Management, 25, 601–614. https://doi.org/10.1016/j.ijproman.2007.03.001

Last update:

  1. Modelling the Upper Tail of Insurance Claim Amount: Evidence from Danish Fire Insurance Data

    同鑫 边. Pure Mathematics, 13 (03), 2023. doi: 10.12677/PM.2023.133063

Last update: 2024-11-24 18:36:10

No citation recorded.