Executive Summary
The world is still far from achieving the full set of Sustainable Development Goals (SDGs) by the 2030 deadline. The UN’s midpoint analysis marked a significant portion of goals in red – denoting "stagnation or regression" – which suggests that many goals are not only off track but are worsening in some regions.
One of the reasons for this dismal progress – besides wars and the pandemic – is the accelerating climate crisis. Climate resilience is crucial to advance the SDGs. The interdependencies between environmental degradation and sustainable development emphasizes the insurance industry's potential to contribute to safeguarding the progress towards the SDGs.
However, insurance is only directly mentioned in one SDG target (SDG 8.10 on financial access) – which is a gross understatement of the insurance industry's role. There are numerous direct and indirect linkages between the insurance sector and the 17 SDGs. For example, the insurance industry can play a pivotal role by providing financial protection against climate risks, directly affecting 30% of the SDG targets. Furthermore, by integrating resilience-building measures, such as nature-based solutions, into their product offerings, the insurance industry has the potential to safeguard progress towards 81% of the SDG targets.
This positive correlation between insurance and SDGs can be measured. Countries that spend more of their economic output on insurance tend to show better progress on the SDGs, reflecting the critical role of risk mitigation in sustainable development. For example, for every 1% increase in P & C insurance penetration, the SDG Index increases by an average of 5.8 points.
We propose that a virtuous cycle of profitable insurance and resilient sustainability can be created. Realizing this potential will require overcoming obstacles such as short-term financial pressures, although in the long run, financial stability and environmental stewardship are mutually reinforcing, rather than competing priorities. Thus, regulators should provide frameworks that make sustainability a competitive advantage in the insurance industry, for example by implementing firm caps on insured and financed carbon emissions to support the achievement of net-zero goals.
The insurance industry itself can greatly amplify its contribution to sustainability by prioritizing resilience-focused products, promoting inclusive access to financial protection, fully integrating ESG criteria and strengthening measurement and reporting standards. Each of these strategies not only strengthens the sector’s alignment with SDGs but also reinforces insurers' long-term value proposition as essential partners in building a resilient and equitable future.