As local regulations on environmental, social and governance (ESG) standards become increasingly sophisticated, Malaysian life insurers believe that a focus on these standards will open up new and attractive investment opportunities.
But I am saying Asian InvestorAt the Malaysia Global Investment Forum in Kuala Lumpur on November 7, Amar Ramachandran, director and head of investments at Manulife Insurance Malaysia, said that while sectors that support and promote ESG standards will flourish, life insurers’ preferred sectors are most likely to face a push. There is a possibility. Asset class first – fixed income.
Amar Ramachandran,
Manulife Malaysia
“Given the hype around ESG now and in the near future, I think there will be more ESG-compliant releases in the market. We will probably see more in the fixed income side first, and then hopefully there will be some very interesting equity listings coming to Bursa Malaysia that we can look at,” he said.
Also read: Malaysian insurers exploring home equity options
At Generali Life, ESG is also a factor it considers when making investment decisions, and will be a part of the company’s risk assessment to improve the selection of future investments.
Alex Chin,
Generali Malaysia
“Since ESG is one of the policy agendas of the government going forward, there should be ample opportunities for us to explore areas like renewable energy and EV (electric vehicles). Another theme will be technology advancements that adhere to the ESG agenda,” said Alex Chin, head of investments at Generali Life Insurance Malaysia.
ambitious rules
While Manulife is based in Canada and Generali in Italy, their Malaysian units must comply with group-wide ESG guidelines as well as guidelines from the Malaysian central bank and regulator – Bank Negara Malaysia (BNM).
In April 2021, BNM released the Climate Change and Principles-Based Classification Guidance Document and then in November 2022 launched the Policy Document on Climate Risk Management and Scenario Analysis.
“These two guidelines demonstrate that the regulator has placed climate change and ESG at the top of the regulator’s agenda as a driving force. We will focus on engaging with the group and Malaysia as a whole,” Chin said.
Also read: Malaysian institutions seeing huge appetite for ESG-related investments
Manulife’s Ramachandran shared anecdotes that when the Malaysia business presented the policy document on climate risk management and scenario analysis at the group level, the new rules were accepted with surprise as it required an ambitious set of guidelines to meet. is seen as.
“There are some intangible elements to handle in the guidelines, but thankfully BNM has given us clear deadlines. For some it is 2023, while for others the scenario analysis is 2024. We are working on completing it,” Ramachandran said.
Also read: Malaysian institutions keep ESG at the forefront of investment strategies
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