Zurich Insurance, which completes its purchase of Beazley, the largest insurer within Lloyd’s of London, on October 1st, has confirmed that its fossil fuel policies will apply to Beazley. This shifts 10% of the Lloyd’s market out of the underwriting of new oil and gas drilling and new metallurgical coal mines, marking a significant moment for a marketplace that has lagged behind other insurers and remains the single largest centre for the insurance of fossil fuels worldwide (1).
Zurich Insurance is one of the world’s largest insurance companies and has been given the final go-ahead by UK courts for its purchase of Beazley, the UK-headquartered insurer, for £8.1bn. In doing so, it gains Beazley’s access to the Lloyd’s of London marketplace.
Zurich’s fossil fuel policies will apply to Beazley: what this means
Zurich and Beazley, like many major insurers, have policies which state that they will not provide insurance for certain kinds of new fossil fuel projects. Beazley only restricts underwriting for new thermal coal and some new unconventional oil and gas.(2) Zurich has the same restrictions, and since April 2024 also excludes the underwriting of new upstream oil and gas (exploration, development and production), as well as metallurgical coal (see Table 1 for an overview).
Zurich’s policy does not go far enough, since it does nothing to restrict the underwriting of new LNG terminals, of which a huge construction spree is planned that would destroy any hope of limiting global temperature rise to 1.5°C.
Nevertheless, Zurich’s fossil fuel policies are stronger than Beazley’s, especially in relation to new oil and gas drilling, and they have recently confirmed that their existing policy will apply to Beazley once the purchase is completed, subject to a ‘transition period’.(3)
Table 1: comparison of the fossil fuel restrictions of Zurich and Beazley
| Type of fossil fuel restriction (all relate to new projects unless specified) | Zurich* | Beazley |
|---|---|---|
| Thermal coal mines and power plants | Yes | Yes |
| Metallurgical coal mines | Yes | No |
| Upstream oil & gas | Yes | No |
| Midstream/downstream oil & gas | No | No |
* A more detailed breakdown of Zurich’s fossil fuel policies can be found in Reclaim Finance’s Coal Policy Tracker and Oil & Gas Policy Tracker
This step cannot be taken for granted. While a group-wide policy would usually apply to an acquired company, there is at least one Lloyd’s insurer for which the group-wide policy does not apply: Brit Insurance does not apply the policy of its parent Fairfax Financial.(4)
A significant moment for the Lloyd’s market and the insurance of new fossil fuels
This development has great significance for the Lloyd’s market as a whole, which for several years has been dragging its feet on climate action. After initially bringing in a market-wide fossil fuel policy in 2020, Lloyd’s has since watered this down to ‘guidelines’ before finally dropping them in 2025.(5) There is currently no market-wide policy for even the most polluting fossil fuels such as coal.
Since 2024, all major European (re)insurers have excluded the underwriting of new upstream oil and gas (6), making the Lloyd’s market the key laggard in Europe.
Beazley, through its managing agent Beazley Furlonge, is the biggest player within the Lloyd’s market: it controls 6 syndicates and had a 10% share of gross written premium at the end of 2023. Reclaim Finance’s 2024 report found that only 7% of the Lloyd’s market was covered by restrictions on risks related to upstream oil and gas. This acquisition raises the proportion to 17%, more than 1 in 6 of the total.
This is more significant because Beazley has been a major player in oil and gas underwriting: in 2024 Reclaim Finance assessed 10 insurance certificates obtained by Greenpeace Norway relating to offshore oil and gas assets in the North Sea, and Beazley was named on half of them.
With such a significant proportion of the Lloyd’s market now expected to withdraw from underwriting new oil and gas drilling and new met coal, obtaining insurance for such projects may become more difficult and expensive, as has happened for new thermal coal mines.(7)
Time for action
While Zurich’s confirmation is a welcome step and an important moment, Lloyd’s cannot simply wait for more managing agents within the market to be purchased by more forward-thinking insurers.
According to the United Nations, it is highly likely that the goal of limiting global warming to 1.5°C by 2100 compared with the pre-industrial era will not be met.(8) Every effort must now be made to avoid each additional fraction of a degree of warming and thereby prevent irreversible tipping points (9) with major consequences for society and its ability to afford insurance.
After a summer in which the UK saw at least 2,800 heat-related deaths (10), and while towns like Tenbury Wells brace for more flooding which threatens to render them uninsurable (11), insurers have a responsibility to act.
For Lloyd’s of London, this means reinstating its market-wide policy on fossil fuel expansion, beginning with restrictions for new coal mines and plants, before expanding the scope to oil and gas expansion. While in the absence of such action, individual Lloyd’s managing agents must bring in, or strengthen, their own fossil fuel policies. (12)
Confirmation that Zurich’s fossil fuel policies will apply to Beazley is a significant moment: it means that 17% of the Lloyd’s market, the largest centre for fossil fuel insurance, will not insure new upstream oil and gas projects. This could make insurance for new oil and gas drilling, vital for projects to go ahead, harder to obtain. Yet Lloyd’s and the managing agents within the marketplace must go further if climate goals are to stay within reach, starting with a mandatory market-wide policy for the most polluting fossil fuels: new coal.
