ESG fund assets forecast for explosive growth, a huge ILS opportunity

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The rapid growth of ESG (environmental, social, governance) appropriate investment products is set to create a “paradigm shift” in investment markets, which could lead to more than 50% of European mutual fund assets invested in ESG funds as soon as 2025, according to PwC.

In a recent report PwC highlights the stunning growth potential of ESG investing, forecasting a base case 21.9% compound annual growth rate (CAGR) from 2019 to 2025 and a best case CAGR of as high as 28.8%.

Those stunning growth projections go some way to explaining the focus in insurance-linked securities (ILS) and reinsurance-linked investments on developing ESG appropriate investment strategies, policies and driving home the features of ILS as an asset class that make it ESG appropriate from the start.

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