London, 9 October 2024 – Lloyd’s of London, the world’s leading insurance market, is holding back climate action through its on-going support for fossil fuel expansion, according to new analysis from Reclaim Finance (1). While other major European insurers’ no longer cover new fossil fuel projects, Lloyd’s of London continues to provide cover, with no requirement that its managing agents have climate polices. The analysis finds that just 5 of Lloyd’s 51 managing agents have policies restricting cover for new coal projects and new oil & gas fields (2). Reclaim Finance is urging Lloyd’s managing agents to take responsibility and introduce robust policies. Meanwhile Lloyd’s should leverage its power to regulate its market.
Lloyd’s of London has positioned itself as the insurance market for the transition (3), but new analysis reveals a shocking failure in leadership, with no requirements that the managing agents (responsible for the syndicates that make up the market) have any policies in place to stop their support for the development of new coal and new oil and gas projects (4), which is key to the transition and also critical for achieving Lloyd’s net zero pledge (5).
Reclaim Finance analyzed the policies of the 51 managing agents in the Lloyd’s market and found that 46, representing 93% of the market, do not have any policies in place to restrict cover to new oil and gas fields (6).
Eighteen managing agents are identified as “slow movers”, including Beazley Furlonge, Hiscox Syndicates, MS Amlin Underwriting and Tokio Marine Kiln Syndicates, as they have a commitment to stop underwriting risks related to new coal mines or new coal plants, but no commitment to stop underwriting risks related to new oil and gas fields.
Twenty-eight managing agents are identified as “ultimate laggards” because they have no policies at all for fossil fuel expansion, including Chaucer Syndicates.
“Lloyd’s of London likes to present itself as championing the transition, but in reality it is allowing
the fossil fuel industry to carry on expanding. Lloyd's has the power and responsibility to control
its own market, but has chosen not to do so, giving its managing agents free rein to turn its net
zero promise into an empty pledge. As a result, it has become the insurer of choice for fossil fuel
expansion. If the Lloyd’s market wants to be taken seriously as a leading player in the transition,
its managing agents need policies now.”
In the absence of any net-zero requirements, Lloyd’s managing agents continue to provide cover for the risks related to new fossil fuel projects and have provided cover for some of the biggest fossil fuel assets, including projects in the high-risk Arctic region (7).
Reclaim Finance is urging Lloyd’s managing agents to stop fuelling climate risks and adopt ambitious policies for new fossil fuel projects that align with Lloyd’s of London’s pledge to reach net zero emissions by 2050 (8). This means no longer providing (re)insurance to the development of new coal projects, new upstream oil and gas projects or new liquefied natural gas export terminals.
And the NGO urges Lloyd’s to use its regulatory power to define a clear binding fossil fuel policy for all its managing agents.
Notes:
(1) For a few dollars more – the Fossil Fuel Policies of Lloyd’s Managing Agents (2), Reclaim Finance, October 2024. See executive summary here.
(2) The five managing agents which are identified as front-runners because they have made a commitment to stop underwriting risks related to new coal mines, new coal plants but also new oil and gas fields (including conventional and unconventional) are Argenta Syndicate Management, AXA XL Underwriting Agencies, Munich Re Syndicate, Probitas Managing Agency and SCOR Managing Agency. See graphic.
(3)Insuring the Transition, Lloyd’s of London, July 2024
(4) Lloyd’s has been given the mandate, by the Prudential Regulation Authority (PRA), to regulate its own market, including the level and type of risks underwritten on its market.
(5) Leading experts, such as the International Energy Agency (IEA), say that to reach the global net zero goal by 2050, no new coal, oil or gas projects should be developed. This includes new LNG export terminals. According Reclaim Finance’s analysis, no managing agent has yet committed not to insure the risks related to new LNG export terminals.
(6) The 46 managing agents without a policy on oil & gas expansion include Beazley Furlonge, Hiscox Syndicates, MS Amlin Underwriting and Tokio Marine Kiln Syndicate. See graphic for the full list.
(7) For example, Beazley Furlonge, Axis Managing Agency and Brit Syndicates have signed a contract with the Polish National Oil Company, Polskie Górnictwo Naftowe i Gazownictwo SA (PGNiG), despite having policies on restricting underwriting for oil and gas related risks in the Arctic region, which is the source for 30% of PGNiG’s oil and gas production.
Talbot Underwriting provided cover for the second-largest LNG export terminal in the US, Freeport LNG, between 2022 and 2023. The terminal is notorious for violating Texas’ state air pollution rules multiple times between 2019 and 2021.
(8) Reclaim Finance’s director Lucie Pinson wrote to Lloyd’s managing agents in April 24 urging the to adopt policies – see here.
