The global insurance industry stands at a pivotal crossroads in the energy transition. Our report, “Renewables Gallop As Fossil Fuels Stall,” provides an analysis of how insurers are shifting from fossil fuels to renewable energy – and whether they’re moving fast enough to meet climate goals.
Here we answer the most pressing questions about the current state of renewable energy insurance, the gap between present growth and climate necessity, and the concrete actions insurers must take to align their portfolios to insure our future.
Common Questions:
- Immediately stop insuring new fossil fuel projects including LNG infrastructure,
- Adopt underwriting targets aligned with a 6:1 ratio of clean energy to fossil fuels by 2030, and
- Align all business activities with limiting warming to 1.5°C.
Why is renewable energy becoming more attractive to insurers?
Renewable energy costs have reached a tipping point, becoming cheaper than fossil fuels in most markets. Solar and wind are now the cheapest electricity sources in most places, and new renewables are often more cost-effective than even existing fossil fuel power generation.
How fast is the renewable energy insurance market growing compared to fossil fuels?
The renewable energy insurance market grew approximately 9% annually from 2020-2024 (in constant 2024 dollars), expanding from $5.65 billion to $8.0 billion. In contrast, the fossil fuel insurance market declined about 2% annually over the same period.
Is the renewable energy insurance market growing fast enough to meet Paris Agreement climate targets?
No. The current 9% annual growth rate is only half of what’s needed. To align with the International Energy Agency’s Net Zero pathway and Paris Agreement goals, renewable energy underwriting needs to grow at least 18% annually through 2030.
Which insurance energy market is larger - fossil fuels or renewables?
The fossil fuel insurance market is over three times larger than the renewable energy market in gross direct written premiums. However, analysis from Insure Our Future finds that the renewables insurance market has grown 9% annually since 2020 while the fossil fuel sector contracted by 2% each year, showing the energy transition is underway.
