Although insurance companies have always been concerned with potential losses due to natural risks, global warming is underscoring the urgency of the problem.

An end to coal

Insurance companies influence the risks that companies can take. VIG uses this lever to help create a more environmentally friendly economy. The decision to withdraw from the coal sector was already part of its climate change strategy in 2019. No new policies are being issued for coal mining or coal-fired power plant projects. Existing policies in this area are being gradually reduced. In 2022, coal risks in the corporate business were reduced by 77% compared to 2019.

VIG analyses climate risks and develops measures to reduce them

Special scenario analyses help to estimate how climate change will affect the frequency and size of losses and, therefore, the insurance business in different sectors. The medium and long-term effects of climate change are also examined in the “Own Risk and Solvency Assessment” (ORSA), a periodic analysis of a company’s own risk situation and capital adequacy (solvency). The main focus is on potential extreme weather events, such as flooding, storms and severe weather with hail, but also earthquakes are considered. Current scientific studies are used to analyse the possible effects of global warming of 1.5°C, 2.0°C and 3.0°C above pre-industrial levels. Natural disasters and their effects are modelled with the help of external experts. The risk models used are constantly improved based on new data and findings, such as newly built flood protection measures. VIG is using its increased underwriting knowledge to purchase reinsurance for the risks it assumes.

Recommendations for reducing risk for corporate and large customers

The more frequent extreme weather events are increasingly affecting the support provided to corporate and large customers, that is, the underwriting process. The support process begins with a careful analysis of the risk situation and protective measures that have already been implemented. The experts at the partner company RiskConsult use this to develop individually tailored recommendations for further improving the risk situation and preventing losses. Companies have an incentive to implement the recommendations because it would reduce their premiums or, in some cases, because they would not be insurable unless they did so.

Informing customers about weather events and raising awareness

VIG has developed a variety of services to help corporate customers and households manage climate risks more effectively. Early warning systems provide warnings for extreme weather events and information systems allow users to better assess risks. These measures reduce risk by, for example, influencing decisions about whether or not to build a house in certain locations. They also make people aware of the relevant risks and draw attention to longer-term trends.

Insurance for innovative, sustainable technologies

The Group has provided insurance for renewable energies, such as wind, hydroelectric, photovoltaic and biomass power, for many years in Central and Eastern Europe. This also offers new business opportunities by opening up new customer groups. The Group is currently one of the leading providers of insurance for renewable energy generation systems in Central and Eastern Europe.

Environmental figures

Conserving resources in the Company’s own business operations is one of the environmental priorities in the sustainability strategy.

Electricity use in kWh 32,585,266 31,406,102 31,226,191 37,714,981
Heating use in kWh 46,723,815 50,236,170 48,633,949 49,172,287
Kilometres of air travel 5,737,750 1,660,305 1,175,961 8,618,909
Corporate carbon footprint in tonnes of CO2 equivalents 30,293 28,525 28,652 35,859
     Scope 1 (direct emissions) in tonnes CO2 equivalents 15,149 14,210 13,512 16,213
     Scope 2 (indirect emissions) in tonnes CO2 equivalents 14,471 14,136 15,022 18,714
     Scope 3 (air travel) in tonnes CO2 equivalents 673 179 118 932
Total energy consumption in megajoules 420,752,426      
  2022* 2021 2020 2019

*Including two additional, newly consolidated insurance companies, with estimated values for one company included in the calculation. Due to a methodology update, higher emission factors were used for district heating (Scope 2).