Paris, 9 November 2023 – Fifty years after they first warned of climate risks, insurers have been caught out by the effects of their inaction on climate (1). These are the findings of the Insure our Future coalition in its new annual “Insurance Scorecard” report, which ranks the fossil fuel policies of 30 of the world’s largest insurers and reinsurers (2). French insurers are no exception: AXA and SCOR are still fuelling climate change by continuing to insure the development of new oil and gas projects, while at the same time reducing the cover available for natural disasters. Reclaim Finance is calling on insurers and reinsurers to end cover for all new oil and gas projects, including new liquefied natural gas terminals.
According to the Insurance Scorecard, 24 of the 30 players analyzed have a coal policy and 22 have an oil and gas policy, an increase of four compared to last year (3). However, only 10 insurers and reinsurers have made a specific commitment not to cover any new oil and gas fields (including AXA, SCOR, Mapfre and HDI – Talanx in 2023) – commitments that are weakened by numerous exceptions (4).
Insured losses due to natural disasters have reached record levels in the last two years, and 2023 could follow suit with more than US$ 100 billion in estimated insured losses, according to the insurance industry (5). As a result, the crisis in the insurance sector represents one of the six climate risks for the planet, due to the increase in the price of cover and the withdrawal of certain insurers from high-risk areas, according to a recent UN report (6).
This year, the top three places in the Insurance Scorecard have been left empty, symbolising the inability of insurers to respond adequately to the climate emergency.
The insurance industry first warned about climate risks in 1973, and these have now become a grim reality, particularly for low-income countries and communities which have contributed least to the climate emergency. Insurance companies are now abandoning customers affected by climate risks, yet they continue to fuel the climate crisis by underwriting and investing in the expansion of fossil fuels.
Peter Bosshard, Global Coordinator of the Insure Our Future campaign
French insurer AXA has been overtaken by three of its European rivals since last year, and is now in 8th place. Reinsurer SCOR is in 13th place. While both have announced this year that they will no longer cover new gas fields, adding to their commitments on oil fields made in 2022, they have retained an exception for companies deemed to be “in transition” according to certain criteria (7), without taking into account whether these companies are developing new fossil fuel projects. This leaves AXA free to insure new oil and gas projects being developed by companies such as TotalEnergies, the world’s 7th largest developer of oil and gas production projects (8)(9).
AXA and SCOR are downgraded because of their repeated support for the largest companies developing new oil and gas projects, which they claim are in transition. Yet AXA and SCOR are paying more and more for the cost of natural disasters. Rather than inflating the price of their cover against climate risks in order to maintain their profitability, they should stop supporting the companies responsible for runaway climate change.
Ariel Le Bourdonnec, insurance campaigner at Reclaim Finance
AXA and SCOR also appear to have a blindspot when it comes to providing cover for new liquefied natural gas (LNG) terminals, despite the fact that the International Energy Agency’s Net Zero Emissions scenario calls for an end to the development of new terminals in order to achieve carbon neutrality by 2050.
Reclaim Finance calls on the insurers and reinsurers assessed in the Insurance Scorecard, including AXA and SCOR to stop providing covering for all new oil and gas fields without exception, including those developed by companies that they wrongly consider to be “in transition”, and to stop supporting the development of new LNG terminals.
