Insurers used to get heat for underwriting fossil fuels. Membership of bodies like the Net-Zero Insurance Alliance (NZIA) was supposed to mean financial groups would cease supporting oil, gas and coal, speeding the pace of decarbonisation. A new study by Insure Our Future, a network of climate activists, suggests things now look a bit different.
Some insurers, like $67 billion Axa (AXAF.PA), $31 billion Assicurazioni Generali (GASI.MI) and $71 billion Zurich (ZURN.S), have at least stopped investing in companies developing the dirtiest fossil fuel, coal. But Warren Buffett’s Berkshire Hathaway (BRKa.N), Everest Re (EG.N), PICC (601319.SS), Sinosure or Starr don’t have any coal exit policies at all, the study says. Similarly, five of the Lloyd’s insurance market’s managing agents – RiverStone, Chaucer, RenaissanceRe, Ascot and Aegis – have not implemented any restrictions on fossil fuels. Insurers have even fewer qualms about supporting oil and gas. According to Insuramore, Lloyd’s insurers accounted for $1.6 billion to $2.2 billion in fossil fuel premiums in 2022, 9% of the world total.
Insurers have cover to do this. Governments have made energy security a key priority since Russia’s invasion of Ukraine, and can reasonably argue that abrupt halts to backing fossil fuels will just mean higher energy prices. The UK’s King’s Speech on Tuesday endorsed the future licensing of new oil and gas fields. With the NZIA ditched by most of its members, insurers have even less incentive to change their ways. (By Pamela Barbaglia)
Click here for an interactive version of the graphic.
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
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