2021 ESG Annual Report

Getting Sustainability Covered

VOICE OF THE CLIENT A Conversation with Hiscox

Insurance companies often have complex group liabilities, with different entities underwriting protection under different capital-adequacy regimes. Can you give us a sketch of Hiscox’s structure and how it influences management of ESG issues? James Millard: We manage to Group capital and risk appetites, but look to optimize investment allocations to local ALM, regulatory and capital requirements. It’s a bit like a game of chess to ensure we deliver to both Group and local entity goals. Similarly, our approach is focused on embedding ESG within each area of our business, rather than building a large specialist sustainability team at the center. We monitor ESG risks for our investments at both Group and local entity level, providing regular updates to stakeholders across the Group. We recently selected a new ESG data provider and extended analytics to include climate stress-testing across our bond portfolios, amongst other ESG risks and opportunities we keep an eye on. Hiscox manages an investment portfolio worth close to £8 billion ($10.8 billion), backing a book of property and casualty insurance and reinsurance risks worldwide. We spoke to Chief Investment Officer and ESG Executive Sponsor James Millard about managing sustainability across its liabilities and its portfolio of largely short-dated fixed income assets.


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