Re/insurance Sector Move Away From Fossil Fuels Accelerates
Re/insurance Sector Move Away From Fossil Fuels Accelerates
With 38% of reinsurers already having oil and gas exclusions and 62% of reinsurers having coal exit policies, insurance company limits on oil and gas are finally starting to catch up with those on coal, according to a new data report from the Insure Our Future campaign.
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The information comes from the yearly scorecard produced by Insure Our Future, which rates the top 30 global fossil fuel insurers according to the effectiveness of their fossil fuel exclusion policies.
Only Suncorp, Generali, and AXA had adopted any limitations on the insurance of conventional oil and gas projects at the time of the COP last year, according to the research.
But over the past 12 months, Allianz, Aviva, Fidelis, Hannover Re, KBC, Mapfre, Munich Re, SCOR, Swiss Re, and Zurich have all adopted a similar strategy, increasing the total to 16.
Re/insurance Sector Move Away From Fossil Fuels Accelerates
As a result, the market share of insurers with oil and gas restrictions has grown from 3% to 38% among reinsurers, says the report, and from 5% to 15% among primary insurers.
It also adds that 18 insurers have ruled out support for Canada’s Trans Mountain pipeline and 16 pledged not to get involved in the East African Crude Oil Pipeline.
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The report notes that this year, Allianz, AXA, and Axis Capital rank best for their coal exit policies, while Aviva, Hannover Re, and Munich Re come out on top for their oil and gas exclusions.
At the bottom of fossil fuel rankings are a group of insurers that have yet to adopt any restrictions on providing cover to coal, oil, or gas projects, which includes US insurers Berkshire Hathaway, Starr, and Bermudian carrier Everest Re.
Re/insurance Sector Move Away From Fossil Fuels Accelerates
The report also notes that the UK’s Lloyd’s of London also scores very poorly, having announced a coal exit framework in 2020 but then backtracked by declaring it optional.
Liberty Mutual, Chubb, and Tokio Marine have adopted some restrictions on coal, says the report, but actively insure the expansion of the oil and gas industry.
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Chinese insurers PICC and Sinosure have not adopted any fossil fuel restrictions but, following Chinese government policy, will no longer cover new coal power plants overseas.
Peter Bosshard, global coordinator of the Insure Our Future campaign and main author of the
Scorecard, commented, “Insurance is the Achilles heel of the fossil fuel industry and has the power to accelerate the transition to clean energy.
Re/insurance Sector Move Away From Fossil Fuels Accelerates
“All insurance companies must immediately align their businesses with the 1.5C goal of the Paris Agreement and cease insuring new coal, oil, and gas projects.”
The report observes that Munich Re, Swiss Re, and Allianz adopted ambitious policies with commitments to stop insuring most or all new oil and gas production projects.
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It also notes that while the number of oil and gas restrictions is growing, the quality is very uneven, with Aviva and Hannover Re having the strongest policies, yet are not major actors in the oil and gas sector.
In contrast, AXA and Zurich, which the report suggests are both major oil and gas insurers, took only minor steps with commitments to end insurance for oil exploration, but not for new oil production or for gas exploration or production.
Meanwhile, major fossil fuel insurers like AIG, Chubb, Lloyd’s, and Tokio Marine have not yet adopted any restrictions on conventional oil and gas.
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