The Evolution of ESG as a Strategic Intangible Asset in Building the Competitiveness of Insurance Companies: A Systematic Literature Review 2016-2026

Ardianta Minggu, Juli 12, 2026
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ESG Emerges as Strategic Asset Driving Insurance Industry Competitiveness, Review Finds

JAKARTA, Indonesia — Environmental, Social, and Governance (ESG) practices have evolved from regulatory compliance requirements into strategic intangible assets that strengthen the long-term competitiveness of insurance companies, according to a 2026 peer-reviewed study published in the Indonesian Journal of Contemporary Multidisciplinary Research (MODERN). The research was conducted by Chusnul Chotimah, a doctoral researcher in Economics, and Prof. Dr. Hapzi Ali from the Doctoral Program in Economics, Universitas Bhayangkara Jakarta Raya. By reviewing a decade of international research, the authors conclude that ESG is increasingly recognized as a core business capability that enhances corporate reputation, stakeholder trust, operational resilience, and sustainable competitive advantage in the insurance sector.

ESG Has Become a Strategic Business Priority

Environmental, Social, and Governance (ESG) principles have rapidly become a defining factor in global financial services over the past decade. Investors, regulators, customers, and business partners increasingly expect companies to demonstrate responsible environmental practices, transparent governance, and meaningful social contributions alongside strong financial performance.

For insurance companies, these expectations are particularly significant. The industry faces growing risks associated with climate change, digital transformation, cybersecurity, changing customer behavior, and evolving regulatory requirements. As a result, ESG is no longer viewed simply as a reporting obligation but as an essential component of long-term business strategy.

Indonesia has also accelerated ESG adoption through financial regulations issued by the Financial Services Authority (Otoritas Jasa Keuangan/OJK), including POJK No. 51/2017 on sustainable finance and the Indonesian Sustainable Finance Taxonomy (TKBI). These regulations encourage financial institutions, including insurers, to integrate sustainability into corporate governance and business operations.

Researchers Reviewed a Decade of Global Evidence

Rather than collecting new field data, the researchers conducted a Systematic Literature Review (SLR) following the internationally recognized PRISMA 2020 guidelines.

The review examined publications from four major scientific databases:

  • Scopus
  • Web of Science
  • ScienceDirect
  • Emerald

The researchers initially identified 1,246 scientific publications related to ESG and competitiveness. After removing duplicate records and screening titles, abstracts, and full-text articles based on predefined quality criteria, 78 peer-reviewed studies published between 2016 and 2026 were selected for detailed thematic analysis.

This approach enabled the authors to identify major research trends and explain how the concept of ESG has evolved within the insurance industry.

Key Findings

The literature review identified several important developments in ESG research.

ESG has evolved beyond regulatory compliance

Research published between 2016 and 2018 primarily described ESG as a tool for meeting regulatory and investor expectations.

Between 2019 and 2022, ESG became increasingly associated with corporate reputation, governance quality, and risk management.

The most recent studies, covering 2023–2026, demonstrate a significant shift. ESG is now widely regarded as a strategic intangible asset capable of creating sustainable competitive advantage rather than merely satisfying compliance requirements.

ESG creates long-term competitive advantage

The review found that ESG possesses the characteristics of a valuable, rare, difficult-to-imitate, and non-substitutable (VRIN) strategic resource under the Resource-Based View (RBV) theory.

Insurance companies that successfully integrate ESG into their business strategy can:

  • strengthen corporate reputation;
  • improve stakeholder confidence;
  • enhance governance quality;
  • reduce sustainability-related risks;
  • improve operational efficiency; and
  • build long-term competitive advantage that competitors cannot easily replicate.

Unlike physical assets, ESG capabilities require sustained investment, organizational culture change, and long-term commitment from top management, making them difficult for competitors to copy.

ESG improves insurance company performance

Across the reviewed studies, companies with stronger ESG performance consistently demonstrated better business outcomes.

The literature indicates that insurers with higher ESG scores generally experience:

  • more stable profitability;
  • lower operational risk;
  • higher customer trust;
  • stronger transparency;
  • improved sustainability reporting; and
  • greater resilience during market uncertainty.

The researchers also found that governance quality and sustainability reporting have become central themes in global ESG research during the 2024–2026 period.

Regulation accelerates ESG adoption

Another important finding concerns the role of public policy.

The review concludes that Indonesia's Financial Services Authority (OJK) acts as a strong institutional driver encouraging insurance companies to adopt ESG practices.

Policies such as POJK No. 51/2017 and the Indonesian Sustainable Finance Taxonomy (TKBI) have encouraged insurers to improve sustainability reporting, strengthen governance, and integrate environmental and social considerations into corporate decision-making. According to the researchers, these regulations increase transparency, accountability, and stakeholder confidence while reinforcing industry competitiveness.

Important research gaps remain

Although ESG research has expanded rapidly, the review identifies significant knowledge gaps.

Most existing studies examine only the direct relationship between ESG and financial performance. Far fewer investigate how ESG influences competitiveness through more complex strategic mechanisms.

Research focusing specifically on the insurance industry also remains limited compared with studies involving banking and manufacturing sectors.

The authors recommend developing more sophisticated empirical models that examine ESG together with organizational capabilities, institutional pressure, and digital transformation to better explain sustainable competitiveness.

Implications for Business and Policymakers

The findings suggest that ESG should be viewed as a strategic investment rather than a compliance expense.

For insurance companies, integrating ESG into corporate strategy can improve governance, strengthen customer trust, enhance operational resilience, and support sustainable business growth.

For regulators, the review demonstrates that well-designed policies play an important role in accelerating ESG adoption across the financial sector.

The study also provides guidance for investors by highlighting ESG as a meaningful indicator of long-term corporate quality rather than simply a sustainability reporting requirement.

As Chusnul Chotimah and Prof. Dr. Hapzi Ali of Universitas Bhayangkara Jakarta Raya conclude, ESG has evolved into a strategic capability that combines governance quality, stakeholder trust, institutional legitimacy, and sustainable business practices to strengthen the long-term competitiveness of insurance companies. Their review further suggests that future research should integrate ESG with digital capabilities, innovation, and institutional factors to better understand how insurers create lasting competitive advantage.

Author Profile

  1. Chusnul Chotimah is a doctoral researcher in Economics at Universitas Bhayangkara Jakarta Raya, Indonesia. Her research focuses on Environmental, Social, and Governance (ESG), sustainable finance, strategic management, insurance industry competitiveness, and corporate governance.
  2. Prof. Dr. Hapzi Ali is a professor in the Doctoral Program in Economics at Universitas Bhayangkara Jakarta Raya. His academic expertise includes strategic management, organizational performance, business sustainability, human resource management, and corporate competitiveness.

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