A1259
Title: How to quantify the reputational risks due to ESG issues on the insurance companies activities
Authors: Valeria D Amato - University of Salerno (Italy) [presenting]
Abstract: Insurance companies and pension funds are increasingly integrating ESG criteria in their business analysis. Nevertheless, only active greenwashing or explicit disregard for environmental protection, as well as only fulfilling reporting requirements, might lead to a big reputational issue for the company. Some studies highlight that reputational risk can quickly lead to actual litigation risks, such as regulatory sanctions or class actions. Actually, reputational risk can involve a significant loss of market value of portfolio assets arising from a controversial event, even though attributing losses to reputational risk may be technically challenging. The aim is to support actuaries and risk managers in identifying and evaluating reputational risks in the context of sustainability issues. We investigate if the ESG reputational risks amplify capital constraints, reducing firms growth opportunities, and increasing the firm probability of exiting the market. Meaningful research can arise from psychometrically sound measures of reputation. Conversely, to assess the value of reputation, we adopt the accounting approach in comparison with the financial one, specifically focusing on the positioning of insurance and pension companies.
