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In response to climate deniers, insurers must step up climate action

Written in collaboration with Reclaim Finance.

Numerous insurers have quit the Net Zero Insurance Alliance (NZIA) under pressure from climate denying politicians and officials in the United States. The insurance industry has for decades been aware of the causes and serious consequences of climate change and its business model is being shaken by repeated multi-billion dollar climate disasters. Insurers and their trade associations need to go on the offensive and send a clear message that insurance will scale up climate action and take on the fossil fuel industry and its climate denying political servants.

A trickle of NZIA members leaving the alliance in April turned into a flood in the second half of May. As of June 5, 17 companies have left the NZIA. This includes six of the alliance’s founder members: AXA, Allianz, Munich Re, SCOR, Swiss Re and Zurich. Out of this founding group of large European re/insurers, only Aviva and Generali are left. The alliance is now less than half the size it was at the start of the year (1).

The flood of resignations was precipitated by a letter from 23 right-wing U.S. state attorneys general (AGs) threatening NZIA members with potential antitrust legal action (2). The letter is a brazenly political attack which accuses insurers of advancing an “activist climate agenda” (3). It absurdly blames high inflation on the so-far moderate steps a small minority of insurers have taken to reduce insurance for fossil fuel companies — while ignoring the role that fossil fuel dependence and climate change have played in recent global price rises (4).

Climate denial is harming insurance, and the planet

It is of course the impacts of climate change that are pushing up insurance costs and causing parts of the world to become uninsurable. Since the early 1990s, global natural catastrophe insured losses have been growing at an annual rate of 5-7% (5) and have averaged about $100 billion over the past five years, with 71% of these losses in North America (6). They have also destroyed the food security and livelihoods of millions of people in poor countries who have contributed the least to climate change.

The response from both reinsurers and primary insurance companies to soaring losses has been to hike prices, limit coverage and even exit some markets (7). Homeowners in regions most exposed to storms and fire are feeling the consequences through steep hikes in property insurance rates. Two of the largest home insurers in California have just left the market due to wildfire risks (8). The Florida homeowners insurance market is in a state of crisis (due to both fraud and massive hurricane damage) which is only likely to deepen (9).

Anti-trust bluster

The antitrust threat made by the U.S. state attorneys general is widely considered to be without merit as the NZIA obliges its members to set (weak) targets and report progress, but not to take specific actions. Meant to protect consumers from price-fixing, antitrust law is being used as a political weapon by fossil fuel industry-funded politicians to scare insurers from taking legitimate and necessary climate action.

It is notable that despite the AGs’ bluster, and as noted by Law.com, “no major climate-related litigation has been filed on antitrust grounds in the U.S.” (10). Alec Burnside, a competition law attorney at international law firm Dechert, says that he has not seen “any antitrust authority, anywhere in the world, having an issue with any of these [GFANZ] alliances” (11). Burnside also notes the need for regulators to clarify that joint action on climate by the private sector is legal and appropriate, as is happening in both the EU and UK (12).

Insurers must double down on their climate commitments

The insurance industry must defend their members’ right to establish climate targets and take climate-related investment and risk management decisions. Insurance Europe, its national member associations, the International Insurance Society and other international insurance associations must forcefully and publicly stand up for increased climate action.

The insurance industry must do much more to promote climate action around the world and to take on fossil fuel interests in the United States. The insurance industry and its trade bodies — including the U.S. arms of the European insurers who have quit the NZIA — must prominently lobby for climate action, and must stop donating to climate denying politicians. Insurers must also step up their efforts to phase fossil fuels out of their insurance and investment portfolios, in-line with low/no overshoot 1.5°C . Insurers must stop insuring and investing in the very fossil fuel companies that are funding the political campaign against them.

The departing NZIA members, including AXAZurich and  Allianz, have stated that they will continue to deliver on their existing climate commitments. SCOR even broadened its climate commitment at the same time as quitting NZIA. Under their net-zero commitments, insurers must publish transition plans in June and set targets in July (13). The Insure our Future campaign and Reclaim Finance will monitor these companies’ actions and hold them to account for implementing stronger climate policies.

Finally, regulation creates a level playing field and enables collective climate action. Insurance regulators need to ramp up efforts to align insurance with credible 1.5°C pathways. The insurance industry needs to support such efforts.

Insurers have been aware of the catastrophic consequences of climate change for at least the last half century and some have advocated for climate action. They now have an increased responsibility to push harder for scaled-up climate action, in the U.S. and around the world, to end their support for fossil fuel expansion and to start phasing out all support for fossil fuels.


  1. Insurance Business, NZIA roster shrinks further, 5 June 2023
  2. Reuters, Analysis: US regulation fears drive insurers’ climate alliance break-up, 1 June 2023
  3. https://attorneygeneral.utah.gov/wp-content/uploads/2023/05/2023-05-15-NZIA-Letter.pdf
  4. The AGs’ state that: “The push to force insurance companies and their clients to rapidly reduce their emissions has led not only to increased insurance costs, but also to high gas prices and higher costs for products and services across the board, resulting in record-breaking inflation and financial hardships for the residents of our states.”
  5. Swiss Re, In 5 Charts: continued high losses from natural catastrophes in 2022, 29 March 2023
  6. Moody’s, Reinsurers defend against rising tide of natural catastrophe losses, for now, 10 January, 2023
  7. Moody’s, Reinsurers defend against rising tide of natural catastrophe losses, for now, 10 January, 2023
  8. Bloomberg, Home Insurers are Fleeing California: Inhabiting areas prone to climate-related disasters has become too risky and expensive, 5 June 2023
  9. CNN, Florida’s homeowner insurance rates are four times the national average. That’s not getting better anytime soon, 1 June 2023; Palm Beach Post, Florida’s insurance crisis: Could State Farm leave the Sunshine State?, 2 June 2023; Reuters, As climate risks rise, flood insurance costs stun US homeowners, 11 May 2023
  10. Law.com, EU to Ease Antitrust Rules in Fight Against Climate Change, 12 February 2023
  11. Energy Monitor, Will antitrust concerns be the death knell for insurer’s net-zero commitments?, 24 May 2023
  12. Financial Times, UK competition watchdog to ease rules on climate change action, 24 January 2023; Financial Times, EU relaxes antitrust guidelines on green initiatives, 2 June 2023
  13. The NZIA’s Target Setting Protocol requires its members to set either engagement, transition, or emission reduction targets by June 2023. They have until June 2024 to set targets for all three categories.

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