Environmental ratings have the strongest correlation with loss ratios, according to the analysis by Howden and Fidelis

Higher ESG ratings lead to better underwriting performance, according to a new joint study by Howden and Fidelis.

The study of loss ratios across 30,000 policies from Howden and Fidelis’ datasets comprising a premium value of around $9bn, against third party ESG ratings, is the largest study that has been conducted to date to establish the link between these factors.

David Howden, CEO, Howden Group Holdings says: “It’s great to see the proactive approach that Fidelis and other insurers are taking to better understand the link between ESG profiles and risk. The data backs up our long-held belief that clients should be rewarded for high ESG credentials.

“This is an obvious way in which the insurance industry can support the transition.

”I hope to see, in the near future, ESG factors built in to underwriting processes and pricing decisions to a much greater degree.”


Environmental ratings have the strongest correlation with loss ratios, according to the analysis. However, there is variation by line of business and industry. Of the multiple lines of business studied, property insurance shows the strongest correlation between better ESG scores and better loss experience. 

Howden and Fidelis are working to further examine the findings with a particular focus on exploring underlying causation, in order to enhance understanding and usability.

Richard Brindle, chairman & Group chief executive and chief underwriting officer of Fidelis says:

“This is a great example of the right thing to do also being the most profitable thing to do.

”Being able to articulate this link will become increasingly important to our interactions with key stakeholders, not least the investment community.”