Insurers have the power to accelerate the phase out of fossil fuels and stop undermining climate change targets.
Without insurance, fossil fuel companies cannot dig new coal mines, build tar sand pipelines, and expand oil and gas production.
Oil & Gas
Only a few insurers have restricted cover for oil and gas
The oil and gas insurance market is highly concentrated among AIG, Chubb, Liberty Mutual, Lloyd’s of London, Mapfre, Tokio Marine, The Hartford, WR Berkley, Allianz, AXA, Munich Re and Zurich, the last four of which are founding members of the Net-Zero Insurance Alliance. While many insurers have adopted restrictions on extreme oil and gas projects, such as Arctic drilling and tar sands, most continue to insure the expansion of conventional oil and gas.
The IEA has found that there is no space for new oil and gas projects if we are to prevent a rise in global temperature above 1.5°C. The insurance industry needs to align its business with climate science.
Most insurers are no longer insuring new coal projects, but they are not phasing out existing coal operations fast enough.
There’s a major loophole in reinsurer’s exit from coal: treaty reinsurance. While reinsurers controlling 56% of the market have adopted policies to stop direct coal coverage, they have failed to rule out coal from bulk-buy contracts or ‘treaties’.
With the exception of a few laggards in the U.S., Bermuda and East Asia, most insurers are no longer supporting new coal projects. But they don’t do enough to push the transition from existing coal to renewable energy fast enough.
Dirty projects: Climate-wrecking fossil fuel projects that should not be insured
Number of companies with fossil fuel exclusion policies, by sector
Insurers, as society’s risk managers, should take responsibility to actively support global action to avoid climate breakdown, and drive the transition to a low-carbon economy. Without insurance most new fossil fuel projects cannot go ahead and existing ones must close.
Click here to view a detailed document on insurance company fossil fuel underwriting policies