Stakeholder pressure on insurance companies to align their business with environmental, social, and governance (ESG) principles has led to the increasing issuance of bonds that incorporate sustainable finance (SF) standards, such as green bonds, since 2019. Insurers have also started to consider sustainability-linked bonds (SLBs) due to their fairly high flexibility as the proceeds’ usage is not limited to funding ESG-focused investments. Under Fitch Ratings’ insurance rating criteria, Fitch’s assessment of SLBs that qualify as regulatory own funds is unlikely to have their ratings and equity credit affected by the additional structural features that would be linked to sustainability targets.SF Debt Instruments Growing FastDebt instruments that focus on SF features have had strong growth in recent years as SF investment strategies have become ever more popular. Issuers’ key motivations are meeting tightening ESG-related regulation, such as the EU’s Green Deal, and stakeholder expectations, as well as lowering refinancing costs. Insurers Prefer Green Bonds So FarInsurance companies have preferred green bonds over other types of SF debt instruments, which is in line with the dominance of green bonds in the broader market and societies’ focus on fighting climate change. Most of the green bonds have been issued in Tier 2 format.