[Financial Engineering (FE) is a process of creating innovative financial models, insurance policies using statistics, financial mathematics, econometrics and computer sciences. FE considers financial, investment, insurance risk coverage needs and requirements of the prospects while designing, developing and launching financially engineered policies into the market. Globally Insurance companies are facing various challenges, hence to attract and retain the customers, all are preferring now to introduce Financially Engineered policies. Furthermore, Insurers must see and consider the recommendations, endorsements, suggestions of Government, other National and International level regulating bodies. United Nations Environment Program(UNEP) is a Global sustainability framework and Financial Initiative (FI) has suggested four important Principles for Sustainable Insurance (PSI) to the Global Insurance Industry. The suggested PSIs were endorsed by United Nations Secretary-General in the year of 2012 with the collaboration of Global Insurance industry. UNEP-FI has considered worldwide Environmental, Social and Governance challenges in the design of PSIs for Insurers and Govt. insurance regulating agencies of all the UN member countries.Sustainable Insurance (SI) means a company which designs financially engineered insurance policies by understanding the insurance risk issues associated with environmental, social and governance systems in the society. If an insurer is able to prevent and reduce the risk by sharing the risk over many shoulders by using FE tools and techniques, these kinds of practices at insurance industry always help the society in giving better insurance protection. Financial Engineering fosters the risk management practices, innovations and underpins the economic development in the insurance sector. So these are the key contributions of the insurance industry for well-functioning and for a sustainable society. The main agenda of UNEP-FI is to reduce and prevent some of the neglected risky areas of the society by the insurance sector in providing insurance coverages through their policies. They are in short name ESGs i.e. risks associated with Environmental, Social and Governance systems of the society. UNEP-FI has recommended four PSIs for the better management of opportunities to provide quality and reliable risk protection features in the financially engineered insurance policies. Sustainable Insurance is an innovative concept designed and launched by UNEP-FI to bring some strategic level importance in the insurance sector. Under this SI concept, all the business operational activities which appear in the insurance value chain will have to consider risks and opportunities associated with environmental, social and governance issues. We can summarize these activities like interactions with core stakeholders of the sector, they are insurers, customers, selling mediators and other marketing supporters. The main aim of SI is to reduce the risk associated with the said three ESG areas, to design and develop financially engineered models, policies and solutions. Same time to improve the business performance by contributing effectively to the identified environmental, social and governance areas and to achieve economic sustainability. Insurers’ sustainability depends on a well financially engineered policy model, with attractive investment, saving and risk coverage insurance features by considering the existing risk factors in the society. This is an explorative and descriptive research study. This is an attempt to see the financial engineering process in sustainable insurance and to examine the various risk management issues in the sector
