THE IMPACT OF ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) PERFORMANCE ON THE GLOBAL INSURANCE MARKET – WITH A SPECIAL FOCUS ON THE WESTERN BALKAN COUNTRIES

ABSTRACT

The integration of environmental, social, and governance (ESG) factors in the insurance sector is becoming increasingly significant as insurers recognize the potential impacts of ESG risks on their business operations and long-term sustainability. This research paper explores the role of ESG criteria in shaping insurance policies, risk management processes, and investment strategies. Using data from leading insurance companies and regulatory bodies, this project demonstrates how ESG considerations influence risk assessment, premium pricing, and portfolio management. The conclusions drawn from this study indicate that insurers that account for sustainability in their operations have enhanced risk management capabilities and improved financial performance. Furthermore, this research examines the evolution of the regulatory landscape and stakeholder expectations, revealing a trend toward greater transparency and accountability in ESG reporting. The paper concludes with practical recommendations for insurers to incorporate ESG principles into their core operations, highlighting the benefits of proactive ESG engagement in fostering resilience, competitiveness, and social responsibility within the insurance industry.

The ultimate goal is to confirm the hypothesis that the implementation of ESG performance positively impacts the insurance industry, particularly on the global insurance market, especially in Western Balkan countries. 

Facing increasingly interconnected and complex ESG challenges, particularly in the context of climate change, the insurance industry cannot remain a mere observer; it must play its role, often utilizing its expertise in risk management.

KEY WORDS: ESG challenges, environment, social responsibility, corporate governance.