Revealed – prime fossil gas insurers

The Insure Our Future marketing campaign warns at the moment in its seventh annual scorecard on insurers’ local weather insurance policies that regardless of the insurance coverage trade’s preliminary warnings concerning the local weather emergency 50 years in the past, insurers are nonetheless contributing to the disaster by supporting fossil gas tasks.

Most insurers proceed to again tasks that improve oil and fuel manufacturing, a stance incompatible with the 1.5°C Paris local weather goal set by main local weather scientists. Based on analysis by Insuramore, fossil gas insurance coverage earned the trade round $21.25 billion in 2022.

Insuramore estimates that insurers at Lloyd’s of London collectively underwrite probably the most fossil gas insurance policies, with estimated annual premiums ranging between $1.6-$2.2 billion. The highest 10 insurers within the fossil gas sector are as follows:

Prime 10 fossil gas insurers in 2022

Pure disasters like floods, hurricanes, wildfires, and droughts have led to a surge in insurance coverage payouts, averaging $110 billion yearly since 2017. Nevertheless, insurers are actually declining to insure owners within the riskiest markets.

Munich Re, the primary to warn concerning the local weather dangers in 1973, noticed that rising temperatures would result in environmental modifications. Nevertheless, regardless of these warnings, fossil gas consumption and CO2 emissions proceed to rise. 1000’s of recent fossil gas tasks are in progress, posing a risk to limiting world warming to 1.5°C.

Local weather change’s results on insurance coverage

The World Vitality Monitor stories quite a few proposed or under-construction fossil gas tasks, together with coal, oil, and fuel extraction tasks, coal energy vegetation, LNG import terminals, fuel, and oil pipelines, amongst others.

Insurers are experiencing elevated monetary dangers because of local weather change. Reinsurance capital decreased by 20-25% in 2022, inflicting a spike in premiums. Main insurers like AIG Re, AXIS Capital, AXA XL, Everest Re, and SCOR diminished cowl or withdrew from the property market.

In response to escalating local weather disasters, main insurers masking over two-fifths of California’s house insurance coverage market have withdrawn. State Farm, Allstate, Chubb, Tokio Marine, AIG, and Berkshire Hathaway’s AmGUARD are amongst people who left, impacting home-owner vulnerability and property values.

Main insurers that joined the Internet Zero Insurance coverage Alliance have additionally confronted criticism for not fulfilling their commitments. Twenty out of 31 members left the alliance underneath the specter of anti-trust motion within the US. Only some have revealed transition plans and web zero targets, failing to undertake targets to cut back their absolute insured emissions by 34%.

“The insurance coverage trade first warned about local weather dangers in 1973, and these have now turn out to be a grim actuality, significantly for low-income international locations and communities which have contributed least to the local weather emergency. Insurance coverage firms are actually abandoning prospects affected by local weather dangers, but they proceed to gas the local weather disaster by underwriting and investing within the enlargement of fossil fuels,” Insure Our Future world coordinator Peter Bosshard mentioned.

“If insurance coverage firms took local weather science severely, they might absolutely align their underwriting and funding methods with a reputable 1.5°C pathway and finish all assist for elevated fossil gas manufacturing. They’d be suing fossil gas firms, to make polluters pay for the rising prices of local weather disasters and maintain insurance coverage inexpensive for climate-affected communities,” Bosshard mentioned.

“A logo of insurers’ failure”

The 2023 Scorecard on Insurance coverage, Fossil Fuels, and the Local weather Emergency, a report collated by 22 organisations throughout 12 international locations, extensively evaluates the local weather insurance policies of 30 main insurers. Notably, the present report contains a important symbolic gesture, leaving the highest three locations vacant in its rating desk, emblematic of insurers’ inadequate response to the continued local weather emergency.

Within the evaluation of fossil gas insurance coverage insurance policies, Allianz leads the rankings for its complete method, with Generali, Aviva, and Swiss Re following carefully behind.

When evaluating coal Insurance coverage, Allianz stands as the only firm with an ideal 10/10 rating, adopted by AXA, Swiss Re, and Generali, illustrating their distinguished insurance policies on this sector.

Regarding oil & fuel insurance coverage, Aviva and Generali showcase strong limitations, although their scores are at 4.0/10. Notably, these firms, alongside German insurers Allianz, Hanover Re, Talanx, and Munich Re, positioned at third, 4th, sixth, and seventh locations respectively, have ceased new insurance coverage for oil and fuel manufacturing with few main exceptions.

Nevertheless, not one of the 30 insurers have terminated protection for brand spanking new fuel energy vegetation, and solely a minimal few have withdrawn assist for the upcoming surge of liquefied fossil fuel (LNG) terminals.

“Insurers speak rather a lot concerning the want for oil and fuel firms to transition away from fossil fuels. In actuality, they don’t seem to be advocating for a transition away from fossil gas extraction however are glad if fossil gas firms undertake shallow web zero commitments, shift from coal to fuel extraction, spend money on renewable power tasks and scale back their operational emissions. This does nothing to cut back the local weather influence of burning the oil and fuel these firms promote, which is by far the largest a part of their life-cycle emissions,” the scorecard mentioned.

What are your ideas on this story? Please be happy to share your feedback beneath.