Definition of Assets under Management for an Insurance Company

[stifje]

Hi,

I work for an insurance company that is primarily involved in non-life insurance, but that also has a subsidiary within life insurance. We find it hard to see which parts of our portfolio that is manditory to include. As of now we know that the non-life insurance part must be included in a science based target, but we are unsure about some of the portfolios.

Here’s a short explanation:

• The non-life part is an asset owner, with both internal and external investments. Our understanding is that all parts that are included in table 5.2 of the guidance must be covered by the target.
• The life insurance part has many portfolios. Some of them are pension profiles where we take the final investment decision. Others are third party funds that are distributed from our platform, where the customer takes all investment decisions. Our understanding is that the profiles where we take the investment decision for the customer has to be included in a science based target. We are however uncertain about how to handle the third party funds that are free to choose for customers. Are they mandatory to include? If so, can you please give an example on how are we expected to express our target for these funds?

[Donald]

Hi @stifje,

Please review these threads that I hope will shed some light on the subject.

Are assets under management covered in the methodology or only owned assets by the institution? Does the asset class listed equity and bonds include both owned assets and assets under management?

SBTi requires that asset managers follow FI-C15 and C16 to set targets on funds managed under discretionary mandates. If the asset manager has discretionary mandate over the funds, the investor has delegated the investment decisions to the asset manager with predefined risk level, time horizon, and other specific needs. Once the mandate is signed, the asset manager proceeds to build a portfolio that matches the investor’s predefined criteria and makes investment decisions on the investor’s behal…

Advisory mandates

Would investment advisory mandates (i.e. investment manager provides recommendations regarding investment strategies to the investor, while the investor takes the investment decisions) be included in the required activities for asset managers (e.g. similar to discretionary mandates) or not applicable and fall under “Advisory services” as defined on p. 57 of the guidelines?

Coverage requirements for insurers

Hi, as in insurer, our assumption is that emissions from insurance as well as from our internal asset managers (subsidiaries) are not in scope of the scope 3 requirements. Is this assumption correct as of 2022? And if yes, will this requirement change in the future? And if no, what is in scope and where is this specified? We only found reference for banks that it’s voluntary for them as of today to include their AM emissions. Thanks! Thomas

Also, please be aware that SBTi applies an influence principle, hence if an FI can influence asset allocation, security selection, strategy design, etc. in some way, these assets should be included. This can be extended to the selection of third party funds available on your platform.