Evidence for the moderating role of ESG on the profitability of insurance companies

Insurance companies strive to incorporate ESG in their businesses, as managers recognize that strong ESG performances are necessary to guarantee access to capital and enhance company value (Di Tommaso and Mazzuca, 2023; Eling, 2024). This article focuses on the moderating role of ESG in determining insurers’ profits. The findings reveal that high ESG ratings amplify the association of profits with underwriting premiums, while weakening the dependence of profits from investments. These findings are important for insurance executives, providing deeper insight into how the improvement of ESG dimensions impacts profits from separate channels. Understanding the dynamics of insurance profits is also relevant from a supervisory perspective, as a sound and well-performing insurance sector is crucial to preserve stability at the systemic level. JEL Codes: G22; G30.