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Sustainable claims: Oliver Wyman’s Rob Bailey on reducing emissions in the claims process


We spoke to Rob Bailey, Partner, Insurance & Asset Management; Climate & Sustainability with Oliver Wyman, about the findings of a recent study the consulting firm has undertaken to identify opportunities to drive down emissions in the claims process – a key scope 3 emission that has to date been overlooked by many insurers. 

Watch the video below for the full interview. Key points summarised below. 

According to Bailey, claims emissions should be a high priority for insurers because:

  • An Oliver Wyman study found claims-associated emissions to be an order of magnitude higher than operational emissions. 
  • Claims restorations often involve carbon-intensive materials (e.g. steel, cement, glass).
  • Sustainability impacts can be significant when the entire claims supply chain is considered.
  • Claims are a tangible, real-world opportunity to engage with clients on sustainability. 
  • Claims emissions should be considered as scope 3 emissions for an insurer, and therefore will need to be disclosed under various reporting directives. 

Challenges to overcome include: 

  • Claims supply chains are complex, involving multiple supply chains and networks (e.g. supplier networks, contractors, lawyers, body shops, etc.
  • Emissions data is patchy and inconsistent.
  • Currently no standard methodology for measuring claims emissions.
  • Balancing sustainable choices/emissions reduction with customer satisfaction, claims costs and combined ratios.

Actions insurers can take to reduce emissions: 

  • Develop a methodology for measuring emissions in the complex claims supply chain (in the absence of an industry standard at this point).
  • Map the claims supply chain.
  • Engage with suppliers/contractors to understand their supply chains. 
  • Identify emissions hotspots within the supply chain (and target emission reduction efforts in these areas).
  • Use the claims process to nudge insureds towards more sustainable choices (e.g. EV courtesy cars, home insulation, green retrofitting, low carbon heating). 
  • Leverage ecosystem relationships to provide these things or steer insureds towards them. 
  • Build ‘repair over replace’ and circularity into claim restoration.
  • Use a robust scope 3 emissions calculator/model to understand emissions embedded in specific materials & processes, etc. 
  • Improve data capture from suppliers over time. 
  • Collaborate with ecosystem partners.