Insurance Talks is an interview series where insurance industry thinkers share their thoughts and perspectives on a variety of market trends and themes impacting indexing.
Clara Bacheré is in Insurance Equity Derivatives Sales at BNP Paribas Securities Corp in New York City, and works closely with insurance carriers and distributors on their annuities product development through customized indices and innovative payoffs, as well as their flow and hedging execution needs.
Maggie is Senior Director, ESG Client Engagement, North America at S&P Dow Jones Indices (S&P DJI). In her role, she assists in the strategy for developing ESG indices for the North American market, from best-in-class approaches like the world-renowned Dow Jones Sustainability Index to broad-market ESG alternatives and core solutions like the S&P 500® ESG Index. She also serves as a global spokesperson for S&P DJI’s ESG Indices, educating the market on the values of ESG investing and our industry-leading ESG lineup.
S&P DJI: Tell us a bit about your role and how you serve the insurance space.
Clara: BNP Paribas services insurers in multiple capacities, and the group that I have the pleasure of working with is our Global Markets Equity Derivatives Division. My part of the team specializes in serving insurance carriers and distributors by contributing to the development of their annuities and life products from A to Z, through customized products and designs such as innovative indices, creative crediting strategies, top notch sales and marketing support, both pre- and post-launch, as well as competitive hedging services. We avoid a one-size-fits-all mindset and actually tailor our approach based on each client’s specific needs and distribution preferences while working closely with them to achieve their vision through cost-effective, innovative products. Together, we target where they would like to be over the next 2-5 years and help them through every step of the way, no matter their starting point. More generally, I find the banking industry to be an exciting place at the forefront of innovation as we are continuously challenging ourselves to find smarter ways of offering better product economics for end clients, all while lowering insurers’ costs.
Maggie: Within the ESG Product Strategy space, my role is to remain focused on the rapidly changing world of sustainability indexing and ensure that S&P DJI remains at the forefront of innovative index construction that addresses the evolving needs of the sustainability-minded investor. Products tied to S&P DJI benchmarks have long been at the forefront of the fixed indexed, variable, and structured annuity markets, as well as the indexed universal and variable life markets. As the indexing needs of the insurance industry have continued to evolve, so too has the range of indexing strategies that S&P DJI has designed to address those needs, including, more recently, ESG solutions. Although ESG indices have more recently gained traction with institutions worldwide, S&P DJI has long been a leading provider of sustainability-driven index solutions, including the launch of the renowned Dow Jones Sustainability Index over 20 years ago.
S&P DJI: 2020 was a watershed moment for ESG investing. How have you seen interest in ESG evolve over time within the insurance industry?
Maggie: Insurance organizations worldwide are becoming increasingly aware of ESG risk factors and their potential impact on their investment portfolios. Large institutions like insurance companies are facing greater pressure from external shareholders to better manage their exposure to things like environmental and social risks. As investors progressively demand ESG options and information related to the environmental and social responsibility of their investments, providers of insurancebased investment products face pressure to meet this demand. More widely, insurers are looking to confirm that their own practices are ethically sound from an ESG perspective in order to maintain continued support from investors and customers. A useful framework to examine in this context is the UN Environment Programme Finance Initiative Principles for Sustainable Insurance (PSI). The PSI is centered around the idea that insurers can play a vital role in encouraging sustainable economic development.