(Correction: Munich Re’s updated investment policy applies restrictions on any new gas infrastructure, not just new LNG terminals. The text has been corrected.)
Last month, Munich Re became the first major reinsurer to restrict the insurance of some new LNG infrastructure. The company updated its fossil fuel policy just weeks after its December Climate Ambition 2030 drew criticism for ignoring gas infrastructure in its underwriting business. The move is modest in scope but significant in what it signals about the growing financial and systemic risks of LNG expansion. It also speaks to the materiality of climate change for the insurance industry regardless of geopolitical headwinds.
What changed
Munich Re’s revised policy, updated in January, adds a new restriction: the company will no longer insure contracts exclusively covering new LNG terminals that are directly and exclusively linked to new gas fields. On the investment side, the policy is broader: Munich Re will not invest in any new gas infrastructure unless aligned with 1.5°C low/no overshoot pathways.
The double qualifier — “directly and exclusively” related to new gas fields — means standalone LNG terminals, import facilities, and expansion infrastructure tied to existing fields can still be insured. Munich Re also still lacks underwriting emissions targets for the oil and gas midstream and downstream sector. While it is progress, some important gaps need to be addressed to demonstrate coherent climate leadership.
These changes build on Munich Re’s existing restrictions on new oil and gas fields, new oil midstream infrastructure, and new oil-fired power plants, which have been in place since 2023. The new restriction extends that logic into new LNG infrastructure for the first time — a notable and urgent step that every other major insurer and reinsurer, except Italian insurer Generali, have yet to take.
Why it matters
This new commitment moves closer to aligning with the leading climate science. The International Energy Agency (IEA) concludes in its 2025 World Energy Outlook that “many of the LNG projects currently under construction are no longer necessary” in a pathway that limits global heating to 1.5˚C.(1) The Intergovernmental Panel on Climate Change (IPCC) warns that emissions from existing unabated fossil fuel infrastructure are enough to exceed the remaining global carbon budget, and that continued installation of unabated fossil fuel infrastructure will lock-in greenhouse gas emissions.(2) LNG terminals and related infrastructure are long-lived assets that can lock in further emissions and increase transition risk, with potential regulatory and reputational implications.(3)
Despite the US push to rapidly expand LNG export capacity, expectations of surging demand in emerging Asia and Europe are increasingly misaligned with market, infrastructure, and policy realities. Import terminals remain under-utilised and structural constraints, from downstream infrastructure gaps to gas turbine shortages,cap future consumption. Demand is already weakening, with Asia’s LNG use falling 5% in 2025(4) and European LNG imports stagnating amid forecasts of sustained decline.(5) For (re)insurers, this emerging oversupply compounds financial and reputational risk — continued support for LNG expansion undermines climate-risk commitments, exposes balance sheets to structurally loss-making underwriting, and diverts capital at a time when renewable energy underwriting needs to rapidly grow. And escalating climate disasters, rising insured losses, and a widening protection gap are placing unprecedented pressure on the core insurance business.
The timing of the announcement coincides with the start of Dr. Christoph Jurecka’s tenure as board chair; advocates are hopeful that this signals a willingness to continue further on the chosen path.
What comes next
Across the globe, renewable energy is a growing and viable alternative to gas power. With renewable energy costs continuing to fall and the economics of new gas infrastructure increasingly uncertain, (re)insurers underwriting long-lived fossil fuel assets face growing financial and reputational risk. Munich Re’s decision to begin reducing some exposure to LNG risks is hardly premature. Following Generali and as the first major insurer to act on LNG, Munich Re has set a precedent to which the rest of the industry must respond and expand upon; lead actors have yet to adopt restrictions on midstream and downstream gas infrastructure.
All eyes are now on Swiss Re, Allianz, and AXA as the next industry leaders to align their business decisions with coherent long term risk management and consequent LNG restrictions. The question now is who will be the best-in-class sector leader with concrete energy transition and decarbonisation commitments that will pave the way for a rapid transition and deployment of low-cost renewables for the next decades to come.
