London, 00.01, 9 October 2024 – Lloyd’s of London, the world’s leading insurance market, is holding back climate action through its on-going support for fossil fuel expansion, according to new analysis from Reclaim Finance. (1) While other major European insurers’ no longer cover new fossil fuel projects, Lloyd’s of London continues to provide cover, with no requirement that its managing agents have climate policies. The analysis finds that just 5 of Lloyd’s 51 managing agents have policies restricting cover for new coal projects and new oil & gas fields. (2) Reclaim Finance is urging Lloyd’s managing agents to take responsibility and introduce robust policies. Meanwhile Lloyd’s should leverage its power to regulate its market.
Lloyd’s of London has positioned itself as the insurance market for the transition, (3) but new analysis reveals a shocking failure in leadership, with no requirements that the managing agents (responsible for the syndicates that make up the market) have any policies in place to stop their support for the development of new coal and new oil and gas projects, (4) which is key to the transition and also critical for achieving Lloyd’s net zero pledge. (5)
Reclaim Finance analyzed the policies of the 51 managing agents in the Lloyd’s market and found that 46, representing 93% of the market, do not have any policies in place to restrict cover to new oil and gas fields. (6)
Eighteen managing agents are identified as “slow movers”, including Beazley Furlonge, Hiscox Syndicates, MS Amlin Underwriting and Tokio Marine Kiln Syndicates, as they have a commitment to stop underwriting risks related to new coal mines or new coal plants, but no commitment to stop underwriting risks related to new oil and gas fields.
Twenty-eight managing agents are identified as “ultimate laggards” because they have no policies at all for fossil fuel expansion, including Chaucer Syndicates.
Lloyd’s of London likes to present itself as championing the transition, but in reality, it is allowing the fossil fuel industry to carry on expanding. Lloyd’s has the power and responsibility to control its own market, but has chosen not to do so, giving its managing agents free rein to turn its net zero promise into an empty pledge. As a result, it has become the insurer of choice for fossil fuel expansion. If the Lloyd’s market wants to be taken seriously as a leading player in the transition, its managing agents need policies now.
Ariel Le Bourdonnec, Insurance and reinsurance campaigner at Reclaim Finance
In the absence of any net-zero requirements, Lloyd’s managing agents continue to provide cover for the risks related to new fossil fuel projects and have provided cover for some of the biggest fossil fuel assets, including projects in the high-risk Arctic region. (7)
Reclaim Finance is urging Lloyd’s managing agents to stop fuelling climate risks and adopt ambitious policies for new fossil fuel projects that align with Lloyd’s of London’s pledge to reach net zero emissions by 2050. (8) This means no longer providing (re)insurance to the development of new coal projects, new upstream oil and gas projects or new liquefied natural gas export terminals.
And the NGO urges Lloyd’s to use its regulatory power to define a clear binding fossil fuel policy for all its managing agents.
