Insurers can play a part in 'green finance', too

Singapore is upgrading its banking standards to maintain its position as a leading financial centre ("Banks get guidelines for responsible lending"; Oct 9).

More people are now environmentally aware, and businesses' ethics in this area do play a part in determining whether someone wants to have a relationship with them.

As another set of key players in Singapore's financial industry, insurers and their intermediaries can play an equally important role in dealing with environmental issues like haze.

Many insurers will have relationships directly or indirectly with companies that could have contributed to the haze in the region.

Examples of insurance relations could be in the form of insurance for credit or marine cargo.

Besides having a direct impact on these companies' business, insurers can support the improvement of the environment in other ways.

Their role can firstly be to guide or provide the right environmental risk management by helping countries or companies to identify risks - and determine the losses resulting from such risks - as well as to create plans to manage such issues.

Insurers can also provide the right kind of insurance for the various parties to deal with consequences of events such as the haze.

Examples would include the loss of income for businesses, the healthcare bill of the people and the Government, as well as the additional cost of the cleanup.

A check on a number of Singapore insurers' websites shows that some of them have green initiatives or  pro-green goals.

It will not hurt for them to be more visible in demonstrating their commitment to protecting their customers from the further deterioration of our natural environment.

Chong Ryh Huei

A version of this article appeared in the print edition of The Straits Times on October 21, 2015, with the headline 'Insurers can play a part in 'green finance', too'. Print Edition | Subscribe