Airlines’ Environmental efforts yet to affect insurance: Experts
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Insurers are broadly supportive of airline sustainability efforts to reduce their carbon footprints, but this has yet to impact underwriting, experts say.
Environmental, social and governance considerations are being widely discussed but are not yet affecting airlines from an insurance standpoint, said Garrett Hanrahan, Dallas-based global head of aviation at Marsh LLC.
In the future, ESG ratings will become more important, and insurers could partner with airlines to encourage ESG efforts, Mr. Hanrahan said.
A bursary provided to airlines by insurers could be allocated to some sort of ESG opportunity around carbon credits, for example, he said.
In some cases, insurance markets are looking to support those airlines that have an ESG agenda, said Joe Trotti, partner-head of aviation and aerospace at McGill and Partners in New York.
“It’s not quite like the energy market where you have markets exiting coal, for example. It’s nothing along those lines, but there is encouragement from the market to basically support that agenda,” Mr. Trotti said.
Jeff Bruno, Morris Plains, New Jersey-based president and chief underwriting officer at insurer Global Aerospace Inc., said the insurer is “highly supportive of emerging technologies and airlines’ approach to biofuels.”
Initiatives like electric aircraft have yet to reach the point where they would represent a “different underwriting proposition,” he said.
ESG is top of mind for major airlines but not yet a factor in underwriting due to the competitive nature of premiums, coverage terms, limits and conditions, said Jason Saunders, Atlanta-based president of Willis Towers Watson Aerospace, a unit of Willis Towers Watson PLC.
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