Evidence for the moderating role of environmental, social, and governance on the profitability of insurance companies
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Silvia Bressan 
, Sabrina Du
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
Insurance companies strive to incorporate environmental, social, and governance (ESG) in their businesses, as managers recognize that strong ESG performance is necessary to guarantee access to capital and enhance company value (Di Tommaso & Mazzuca, 2023; Eling, 2024). This article focuses on the moderating role of ESG in determining insurers’ profits, analyzing a panel data set covering insurance companies worldwide during the period 2013 to 2024. The results reveal that high ESG ratings amplify the association of profits with underwriting premiums while weakening the dependence of profits on investments. Additional outcomes show that ESG has an effect on the composition of the investment portfolio, inducing insurers to have larger shares of assets invested in debt securities than in equity-type securities. These findings are important for insurance executives, providing deeper insight into how the improvement of ESG dimensions impacts profits from separate channels, while also having an influence on investments. Understanding the dynamics of insurance profits is relevant from a supervisory perspective, too, as a sound and well-performing insurance sector is crucial to preserve stability at the systemic level.
Keywords: Insurance Companies, Profitability, ESG, Underwriting, Investment
Authors’ individual contribution: Conceptualization — S.B.; Methodology — S.B. and S.D.; Formal Analysis — S.B. and S.D.; Writing — Original Draft — S.B. and S.D.; Writing — Review & Editing — S.B. and S.D.; Supervision — S.B. and S.D.; Funding Acquisition — S.B.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: G22, G30
Received: 17.03.2025
Revised: 05.05.2025; 14.05.2025; 23.07.2025
Accepted: 12.08.2025
Published online: 15.08.2025
How to cite this paper: Bressan, S., & Sabrina, D. (2025). Evidence for the moderating role of environmental, social, and governance on the profitability of insurance companies. Risk Governance & Control: Financial Markets & Institutions, 15(3), 157–165. https://doi.org/10.22495/rgcv15i3p13
