Georg Winter discussed with Hartwig Löger, CEO of VIG, whether our societies are risk literate enough, why organisations don’t shout about transforming social aspects of their organisations to the same extent as they do about environmental issues, and why they should be.
A recent study conducted in nine countries in CEE by Vienna Insurance Group (VIG) found that two thirds of respondents showed clear weakness when it came to correctly categorising risks and lacked the ability to find preventative solutions or take appropriate safeguards against them, especially in the younger generations. On the back of this research, Georg Winter, Group CEO at GrECo discussed with Hartwig Löger, CEO of VIG, whether our societies are risk literate enough, why organisations don’t shout about transforming social aspects of their organisations to the same extent as they do about environmental issues, and why they should be.
Winter: It’s time to talk about ESG (again!). Companies across Central and Eastern Europe are heavily engaged with ESG concerns, making tangible environmental changes to their processes and practices, and vocally championing their ecological transformation. In addition, organisations are educating employees about green changes they can make at work and home, all while executive and management boards focus on governance and reporting to meet ESG standards. Things are changing, people are talking – it’s all good stuff!
However, companies seem quieter about the social aspects. While they are addressing them in the workplace, they aren’t necessarily as vocal about what they are doing and the strides they are making. This raises the question: have we forgotten the “S” in ESG? Why don’t we champion the steps being taken to mitigate against risks caused by diversity, migration, and social inequality transformation as passionately as we do environmental issues?
Löger: You’re right; it does seem organisations have forgotten to talk openly about the “S” in ESG, and I think that’s reflected in society as a whole. The environmental element is strongly supported politically at the European level and is evident in investment strategies, insurance technology, and operational activities. The ecological momentum is immediately recognisable. However, the social element, such as affordable housing—a fundamental right clearly defined at the UN level—is rarely implemented by companies through social activities.
I think our risk literacy study, whose results are shocking but not surprising can help shed some light. If all elements of society, and especially the younger generations, are unable to categorise risks and problem-solve effectively to find solutions and safeguard against the risks in their lives, do people perceive social aspects as having no, or at least very few, risks? I think risk literacy is key here. If risk literacy is so low, and a mentality of fully comprehensive insurance prevails, then this must be having an impact on how we perceive social aspects at work and in broader society, and therefore how much we shout about them.
Integrating risk competencies into society
Winter: Risk literacy is indeed crucial, and it’s central to our mission at GrECo. We specialise in helping companies prepare for the future and manage risks. It’s essential to adopt a forward-looking perspective and develop risk forecasts that account for transformation processes. This means considering not only climate and ecological issues but also the social impacts on businesses and society at large.
Like you, we are actively educating our clients to think differently and become more risk aware. The challenge is how we extend this awareness to society, particularly to younger generations. How can we make them aware of the risks they will face in 20 to 30 years and equip them with future-proof strategies to assess and address these risks?
Your study underscores the urgency of this task, and we must act swiftly to integrate risk awareness into education and societal dialogue. I believe this proactive approach is vital for fostering a resilient and forward-thinking society.
Löger: At VIG, we focus on integrating risk competence into society, targeting both our customers and broader societal issues. Currently, we’re conducting a Great Place to Work survey among our employees to address these issues directly and positively. We’ve emphasised raising awareness of risk rather than just financial literacy, which banks often highlight. Our core competence as insurers lies in understanding and managing risks. Our recent study examined how well people, especially young individuals, assess risks, understand their consequences, and take preventive measures.
There’s a significant lack of knowledge and information in these areas. For instance, the EU taxonomy in the social sector remains relatively unclear with few measurable or GPI-related principles defined.
This highlights a critical need for training. We aim to integrate these topics into education systems across our markets, starting from kindergarten through to students. Just like with financial literacy, young people often overlook certain dangers or risks without foundational education. If these topics aren’t included early on, advisory options in daily life are often perceived solely from a sales perspective.
Going beyond gender equality
Winter: Let’s discuss some common risks faced by companies under the “S” in ESG, starting with diversity. While society has made significant strides in accepting gender differences, diversity encompasses much more such as ethnicity, language, age, ability, socioeconomic background, and so on. At VIG, you view diversity as a strength that adds value. How does VIG, a multi-national organisation with 29,000 employees, approach issues of origin, particularly in countries like Georgia, Albania, and the Baltic States? What specific goals are you setting to make diversity tangible and impactful across the Group?
Löger: Our Group values the diversity of nations and countries as a unique selling point. With a presence in around 30 countries, and 50 insurance companies and pension funds, we embrace the incredible heterogeneity in markets, mentalities, and people. This diversity allows us to positively exchange ideas and utilise different market developments and approaches.
We focus on working together and leveraging various experiences, approaches, and opinions. This diversity is evident at our headquarters in Vienna, where many colleagues collaborate as a result of this cooperation. We encourage this by not only employing colleagues abroad through project work or direct roles but also by giving them opportunities to hold positions at our headquarters in Austria.
The future for a demographically shrinking market
Winter: Diversity often happens in organisations through demographic change. There are studies by the World Bank that show population trends over the last 30 years: Western Europe is experiencing double-digit growth, while Eastern Europe, for example in Romania and Hungary, the population is declining; dramatically in some cases. What’s the future going to look like in a demographically shrinking market? How are you dealing with this challenge at VIG and what can the insurance industry do about it?
Löger: This situation is cyclical. Central and Eastern European countries in the EU, like the Czech Republic, Slovakia, and Hungary, faced a strong outflow of people and brain drain 15-20 years ago. Today, due to strong economic growth and significant catch-up, these countries enjoy full employment and positive demographic trends, with many people returning.
I believe Romania and Bulgaria can also build a stable foundation. Their economic growth, driven by targeted investments, shows potential for recovery. This growth, combined with policy measures, could alleviate some pressure on Western European countries facing skill shortages, particularly in professions like nursing. From my experience observing Slovakia and the Czech Republic, I see positive medium- and long-term growth prospects in Central and Eastern Europe.
Winter: There’s a key point in there – shortage of skilled labour. Full employment in Eastern Europe has an impact on all of us. If we return to the insurance industry, the issue of when we retire will become increasingly relevant. We have to get people to enthusiastically want to and be able to work for more years. On the other hand, of course, there is also pension provision and pension cover, which is coming under increasing pressure due to demographic change. Are we doing enough as an insurance industry, or what can we do? Perhaps this is another opportunity for our industry to position itself more strongly and offer solutions to these challenges.
Löger: I believe enormous momentum has been created, particularly with experiences from COVID-19 showing the development of new working methods, remote work, and flexible hours. This shift has positively demonstrated that performance can be measured by results rather than time clocks, and productivity can thrive in a more flexible environment. Companies, including ours, have learned much from this.
The younger generation, in particular, benefits from a more flexible work-life balance, which doesn’t hinder company productivity. This presents a great opportunity to optimise life balance positively. The upbeat feedback indicates that offering flexibility creates opportunities for the company itself. As a financial services provider, we may even have an advantage over production sectors, which face more constraints. We can be exemplary in several areas and continue to develop our working models to fit with a changing society and its needs.
Inspiring younger generations
Winter: It’s exciting; I recently spoke with young people from our region about remote working. Some managers still don’t allow remote work, even when it’s technically possible, such as a technician creating CAD drawings, for example. This relates to leadership styles, which have evolved significantly. Leadership is crucial, but creating meaning in work is equally important.
Everyone is discussing mental health, and studies show an increase in sick days. Analysing the reasons for this is vital. Meaningful work is crucial for emotional resilience, as a lack of it can lead to burnout. As the insurance industry, we must take preventative action and assume responsibility in leadership. Students often find the insurance industry boring, but if we define and live a meaningful purpose, our contribution becomes more significant to them.
Löger: There are studies that show that both overwork and underwork – so-called ‘boreout’ – can have negative effects on health, often with similar symptoms. The challenge is to determine whether one of the two situations is present. If people do not recognise a vocation in their job or are not adequately challenged, this can also have a negative impact on mental health. Leadership is crucial here – especially in times of remote working: it’s about not linking performance to presence or time measurements, but instead relying on trust in employees and their willingness and ability to perform. Managers who still think classically in terms of attendance control must learn that it is about content and freedom of choice. The ability to make decisions and develop them independently is tantamount.
Can AI provide the answer to new risks?
Winter: The topic of insurance is closely linked to claims. On the one hand, we are facing demographic change and need to increase productivity, be it due to inflation or increased energy and production costs. On the other hand, we have fewer talented people available, which can lead to a certain overstretch. On the horizon is the danger of new risks arising on the claims side in the corporate context. For example, the lack of skilled labour could mean that damage cannot be prevented or minimised due to a lack of craftsmen who can properly repair or maintain machines. And if damage does occur, the loss of skills could mean that we no longer have anyone who can repair the machines. I see this as a potential risk.
Löger: It’s a pragmatic realisation that, after storm damage, finding a tinsmith to repair hail-damaged roofs is difficult due to a shortage of skilled tradespeople and young talent. This impacts both private and industrial repairs. However, the strong trend towards automation and robotics in production and repairs helps mitigate this issue. Digitalisation and AI offer opportunities to replace human input and support productivity in many areas positively.
Good governance of these systems is crucial to avoid social tensions. The challenge lies in ensuring widespread access to and fair use of these technologies. This is a political and societal task that must be organised in a structurally and socially fair manner.
There’s work to be done
Winter: Social aspects in the workplace is a vast topic, but I think we’ve successfully managed to shed some light on whyorganisations are less vocal when it comes to social versus ecological transformation in the workplace. And it’s very clear that there is still a lot of work to be done, and that the insurance industry can help in driving changing perceptions as to the importance of mitigating against social risks in the workplace.
For businesses, the next steps involve integrating social risk awareness into their strategic planning and reporting. Politicians must support these efforts by creating robust policies that incentivise and perhaps mandate the social components of ESG, ensuring that social equity is given the same importance as environmental sustainability. Societies, particularly educational systems, should focus on increasing risk literacy from a young age, preparing future generations to recognise and address both social and ecological risks effectively.
Addressing the “S” in ESG with the same vigour as the “E” will not only foster more holistic organisational practices but also contribute to more resilient and equitable societies.
About Hartwig Löger
Hartwig Löger is one of the most-experienced Austrian insurance executives and former politician who served as Minister of Finance from 2017 to 2019. Löger has been a member of the Managing Board of Vienna Insurance Group (VIG) since January 2021 and took over as Chairman of the Managing Board of VIG on 1 July 2023.
About VIG
Together, the VIG companies form the leading insurance group in Central and Eastern Europe. VIG Holding is headquartered in Vienna and manages and supports over 50 insurance companies and pension funds. The insurance companies are established in their respective regional markets and their roughly 29,000 employees provide the best possible protection against the risks of day-to-day life for roughly 28 million customers.
The VIG strategy is aimed at achieving sustainable profitable growth. It relies on diversity as a success factor. The wealth of different languages, cultures and entrepreneurial approaches ensures the greatest possible proximity to customers and promotes innovation and creativity.
HORIZON Risk Thought >> Fast Forward
The complexity of today´s risk environment is changing at an accelerating pace, making risk management even more challenging. We have created HORIZON, firstly as a print publication and now as a page for sharing the latest insights about ongoing transformations. Our risk specialists will continue to provide their expertise and knowledge to shine a light on the challenges of the future.
Hartwig Löger
Chairman of the Managing Board
VIG
Georg Winter
CEO GrECo Group
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