QBE to invest premiums into affordable housing

As of this week, QBE will invest a proportion of its 5.2 million policy premiums into “socially progressive projects in Australia”.

The Premiums4Good initiative aims to create “positive social and environmental change”, at no additional cost to the policyholder.

Said to be a “global-first” initiative, it was launched across QBE’s European Operations in 2015 and piloted in Australia through its Elders Insurance in 2016.

The program has now been officially launched in Australia and will see QBE invest customer-paid premiums into socially responsible or environmental projects.

The investments will include social impact bonds, which are public-private-social sector partnerships that allow private investors to provide upfront capital for public projects that deliver social and environmental outcomes.

The Premiums4Good investments will include The Benevolent Society Social Benefit Bond, and will support up to 400 families in Australia that are at risk of having their children removed and placed into out-of-home care. The bond aims to see more children being able to remain safely with their families.

The insurer will also invest in green bonds, which support renewable energy and resource and water conservation projects.

QBE has said that it will initially invest a minimum of $100 million towards assets with an additional social or environmental benefit in 2018.

The amount is expected to increase in future years.

QBE Australia & New Zealand CEO Vivek Bhatia commented: “Research shows Australians are increasingly mindful about what they invest in. We look at an investment, we want a return, but know investments can do more. And fortunately, with more social and environmental investments available, insurance businesses can do both.

“Premiums4Good invests for social, environmental and financial benefit. At the same time, this initiative gives our customers and partners comfort they’re helping drive positive change.

 “Through Premiums4Good, we will set aside a growing pool of premiums to achieve both financial and socially responsible returns.”

The chair of the Australian Advisory Board on Impact Investing, Rosemary Addis, welcomed the announcement, saying: “QBE’s launch of Premiums4Good signifies a progressive step for the insurance industry. The initiative highlights the growing trend of institutions making investment choices based on their impact on society as well as financial performance.”

[Related: Sydney house prices to drop by 5.4% by 2020]