Glasgow, November 3, 2021. The global insurance industry is undermining efforts to meet climate targets by continuing to support new oil and gas production, the Insure Our Future campaign reveals today in its fifth annual scorecard on insurers’ climate policies.

Only three insurers, France’s AXA, Italy’s Generali, and Australia’s Suncorp, have adopted policies to stop insurance for much or all new oil and gas production projects, despite warnings from the International Energy Agency and Intergovernmental Panel on Climate Change that the planet cannot afford any fossil fuel expansion if it is to meet the 1.5°C Paris target.

The industry is now coming under growing pressure to act. UN Secretary General Antonio Guterres told the Insurance Development Forum in September: “We need net zero commitments to cover your underwriting portfolios, and this should include the underwriting of coal – and all fossil fuels!”

While most insurers are stalling on oil and gas, the industry’s exit from the coal sector continues at a rapid pace, with tangible results. Since 2017, 35 insurers have withdrawn cover from coal, up from 23 a year ago, including over 50% of the global reinsurance market. Coal companies now face soaring premiums, reduced coverage and longer searches to find insurance. U.S. and Bermuda insurers provide the last lifeline to an increasingly un-insurable industry.

Peter Bosshard, Global Coordinator of the Insure Our Future campaign, said: “The insurance industry is abandoning climate leadership by continuing to underwrite new oil and gas projects. The scientific consensus is clear: we cannot avoid a climate catastrophe if we expand fossil fuel production. Insurance companies need to follow the science and stop insuring all new coal, oil and gas projects if they want to regain their credibility as climate leaders.” 

U.S. Senator of Rhode Island, Sheldon Whitehouse said: “U.S. insurers continue to underwrite new oil and gas projects and invest in fossil fuel assets that pose a massive risk to the future of the planet, as well as to the insurance industry itself. Insurers hold a lot of influence over the future of fossil fuels, and they have an opportunity to help lead the planet to safety.” 

The insurance industry has a unique power to drive the transition to a low-carbon economy by aligning its business with a pathway to prevent a rise in global temperature above 1.5°C. Insuring Our Future: The 2021 Scorecard on Insurance, Fossil Fuels and Climate Change, focuses on 30 of the world’s top insurers. It is published by 26 organizations from 14 countries and will be launched today at the COP26 UN Climate Summit in Glasgow.

Continued Industry Support for Oil and Gas Expansion

While 14 insurers have tar sands exit policies, only 3 insurers have made moves on all oil and gas, despite scientific consensus on the need to end all fossil fuel expansion.

Four founding members of the Net-Zero Insurance Alliance (NZIA) — AXA, Allianz, Munich Re, and Zurich — provide more than 20% of all oil and gas insurance despite committing to align their underwriting portfolios with a 1.5°C pathway. AXA’s new policy allows it to continue insuring more than half of planned oil and gas expansion.

Lucie Pinson, Executive Director of Reclaim Finance, said: “It’s a mark of shame that none of the members of the Net Zero Insurers Alliance have heeded the call from climate scientists and the IEA to end insurance for new oil, gas and coal projects. Even the new policy from its chair, AXA remains a long way from what science demands, despite constituting a step in the right direction. NZIA members have a special responsibility to lead from the front on climate – we call on them and all other insurers to match and exceed AXA’s commitment by ending support for the expansion of all fossil fuel production.”

Just 10 insurers control about 70% of the global oil and gas insurance market. AIG, Travelers, Zurich, Allianz, Chubb and Liberty Mutual could together end more than half the underwriting of the industry.

The 18.5 billion USD insurers receive in annual premiums from oil and gas is only a drop in the bucket compared to their overall revenue, and there are growing financial incentives to act. French bank Société Générale has reported that insurers with strong coal and ESG policies are adding billions to their value, and that “reducing exposure to oil and gas” could “unlock an additional ‘green premium’ for the sector.”

Read more in the 2021 Insurers Scorecard media briefing

Press contacts:

Lucie Pinson, director, lucie@reclaimfinance.org, +33 (6)79543715

Angus Satow, press officer, angus@reclaimfinance.org, +447847754046