Investment Insurance Banks & Building Societies Mortgages See Insurance Ethical Comparisons Ethical Money – Insurance Choosing insurance companies is a bit of a lottery. They might be offering the best deal today, but who knows what will happen in the future? Increased risk of natural disasters such as flooding could affect the cover these companies offer. Stay ahead of the main players by keeping track of their shares and where they choose to invest, as this is a good indicator as to the ethical standard of their policies. Ethical Insurance A key question for individuals is which shares the money is invested in. According to Friends of the Earth, ‘the fate of the global environment is in large part under [institutional investors’] control, and yours too – because it is your money and you are their client’. However, the Ethical Money partnership says that ‘no insurer has an “ethical investment” policy whereby they avoid investing in particular types of company’. Campaigners have become increasingly impatient over unethical corporate activities and they are learning how to put pressure on insurance companies as shareholders. One way to make this pressure work is to keep people aware of what their insurers are investing in. Campaigners ask the insurance companies to use their own power as shareholders to vote or create pressure for more ethical or environmentally sound behaviour by the target company. By working together, campaigners and individuals can push these companies to change their policies. Plummeting Shares As share prices plummeted in 2001 and 2002, many insurance companies went through a difficult time and saw their assets devalued, as their own investments in stocks, shares and property markets began to mark up losses. Premiums started to rise and companies became much more careful about the risks they were prepared to cover. In the UK, flood cover was withdrawn from a lot of homes that were deemed to be at risk. So-called natural disasters have required insurers to make huge pay-outs, the rate of which has been doubling every decade. One report in 2002 warned that more frequent natural disasters in future could bring insurers, re-insurers and banks ‘to the point of impaired viability or even insolvency’. The insurance companies usually offset their potential liabilities by trading some of the premium (like a bookie ‘off-setting’ a large bet with another bookie) with a re-insurance company. Many of these companies have now become involved in the UN Environment Programme’s Insurance Industry Initiative, which commits them to working together to address issues such as pollution reduction, efficient use of resources and climate change – or in other words to try to work out more sustainable development policies around the world. Ethical Insurers There are some insurers who can be regarded as ‘ethical specialists’. Naturesave places 10 per cent of premiums into a fund (The Naturesave Trust) which finances projects that benefit the environment. The company offers a free environmental performance review to businesses and charities to help spread awareness of sustainable development. The ETA is an insurance company owned and run by environmentalists that are committed to promoting sustainable transport. They raise awareness about how transport has an impact on our way of life and the environment. The ETA provides travel, home and bicycle insurance, as well as breakdown cover for vehicles and mobility scooters. See www.eta.co.uk and www.etatrust.org.uk for further details. For those seeking ethical pet insurance, Animal Friends dedicates its profits to the care of animals and their environment (www.animalfriends.org.uk). See Insurance Ethical Comparisons Key Research Below you will find links to the key sections of our ethical research in Finance and Money: Banks & Building Societies Insurance Mortgages Investment We have created ethical insurance comparison rankings for the following brands, based on the activities of the company group (see ethical comparison table): AA, Admiral, Allianz, Animal Friends, Ansvar, AVIVA, AXA, Budget Insurance, Bupa, Churchill, The Co-operative Insurance, Diamond, Direct Line, Ecclesiastical, Elephant, ETA, Express Insurance Services, Grove & Dean, Hastings Direct, Insure Green, John Lewis, KwikFit Insurance Services, Legal & General, LV= (Liverpool Victoria), More Than, Naturesave, Priviledge, RAC, Swinton and Zurich. Disclosure: Some of the links above are affiliate links, meaning we earn commission if you click through and make a purchase. Placement and use of these links has no bearing in terms of the ethical scores that we give to a brand. All commission earned by The Good Shopping Guide is re-invested into the research carried out by The Ethical Company Organisation.