Revealed – Which insurers are covering the most fossil fuels?

Revealed – Which insurers are covering the most fossil fuels?

Revealed – Which insurers are covering the most fossil fuels? | Insurance Business Canada

Environmental

Revealed – Which insurers are covering the most fossil fuels?

Campaign beckons industry to support climate target

Environmental

By
Kenneth Araullo



The Insure Our Future campaign warns today in its seventh annual scorecard on insurers’ climate policies that despite the insurance industry’s initial warnings about the climate emergency 50 years ago, insurers are still contributing to the crisis by supporting fossil fuel projects.

Most insurers continue to back projects that increase oil and gas production, a stance incompatible with the 1.5°C Paris climate target set by leading climate scientists. According to research by Insuramore, fossil fuel insurance earned the industry around $21.25 billion in 2022.

Insuramore estimates that insurers at Lloyd’s of London collectively underwrite the most fossil fuel policies, with estimated annual premiums ranging between $1.6-$2.2 billion. The top 10 insurers in the fossil fuel sector are as follows:

Top 10 fossil fuel insurers in 2022




Rank 



Name 



Country of HQ 



Premium range (millions)



Midpoint 







1. 



AEGIS 



Bermuda 



1,550-1,850 



1,700 





2.  



PICC 



China 



1,250-1,650 



1,450 





3. 



Sogaz 



Russia 



800-1,100 



950 





4. 



Chubb 



USA 



550-850 



700 





5.  



Allianz 



Germany 



475-775 



625 





6.  



AXA 



France 



450-750 



600 





6.  



Fairfax Financial 



Canada 



450-750 



600 





6. 



Zurich 



Switzerland 



450-750 



600 





9. 



W.R. Berkley 



USA 



525-625 



575 





10. 



AIG 



USA 



425-675 



550 




Natural disasters like floods, hurricanes, wildfires, and droughts have led to a surge in insurance payouts, averaging $110 billion annually since 2017. However, insurers are now declining to insure homeowners in the riskiest markets.

Munich Re, the first to warn about the climate risks in 1973, observed that rising temperatures would lead to environmental changes. However, despite these warnings, fossil fuel consumption and CO2 emissions continue to rise. Thousands of new fossil fuel projects are in progress, posing a threat to limiting global warming to 1.5°C.

Climate change’s effects on insurance

The Global Energy Monitor reports numerous proposed or under-construction fossil fuel projects, including coal, oil, and gas extraction projects, coal power plants, LNG import terminals, gas, and oil pipelines, among others.

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Insurers are experiencing increased financial risks due to climate change. Reinsurance capital decreased by 20-25% in 2022, causing a spike in premiums. Major insurers like AIG Re, AXIS Capital, AXA XL, Everest Re, and SCOR reduced cover or withdrew from the property market.

In response to escalating climate disasters, primary insurers covering over two-fifths of California’s home insurance market have withdrawn. State Farm, Allstate, Chubb, Tokio Marine, AIG, and Berkshire Hathaway’s AmGUARD are among those that left, impacting homeowner vulnerability and property values.

Leading insurers that joined the Net Zero Insurance Alliance have also faced criticism for not fulfilling their commitments. Twenty out of 31 members left the alliance under the threat of anti-trust action in the US. Only a few have published transition plans and net zero targets, failing to adopt targets to reduce their absolute insured emissions by 34%.

“The insurance industry first warned about climate risks in 1973, and these have now become a grim reality, particularly for low-income countries and communities which have contributed least to the climate emergency. Insurance companies are now abandoning customers affected by climate risks, yet they continue to fuel the climate crisis by underwriting and investing in the expansion of fossil fuels,” Insure Our Future global coordinator Peter Bosshard said.

“If insurance companies took climate science seriously, they would fully align their underwriting and investment strategies with a credible 1.5°C pathway and end all support for increased fossil fuel production. They would be suing fossil fuel companies, to make polluters pay for the growing costs of climate disasters and keep insurance affordable for climate-affected communities,” Bosshard said.

“A symbol of insurers’ failure”

The 2023 Scorecard on Insurance, Fossil Fuels, and the Climate Emergency, a report collated by 22 organisations across 12 countries, extensively evaluates the climate policies of 30 major insurers. Notably, the current report features a significant symbolic gesture, leaving the top three places vacant in its ranking table, emblematic of insurers’ insufficient response to the ongoing climate emergency.




(Re)insurer 



Category 



Country 



Coal Insurance 



Oil and Gas Insurance 



Total Ranking 









  



  



  



  









  



  



  



  









  



  



  



  







Allianz 



Insurer 



DE 











Generali 



Insurer 



IT 



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Aviva 



Insurer 



UK 











Swiss Re 



Reinsurer 



CH 











AXA 



Insurer 



FR 











Hannover Re 



Reinsurer 



DE 











Axis Capital 



Reinsurer 



BE 





13 



10 





Zurich 



Insurer 



CH 





11 



11 





Munich Re 



Reinsurer 



DE 



10 





12 





SCOR 



Reinsurer 



FR 





10 



13 





HDI Global – Talanx 



Insurer 



DE 



12 





14 





Mapfre 



Insurer 



ES 



11 





15 





QBE 



Insurer 



AU 



13 



15 



16 





AIG 



Insurer 



US 



14 



14 



17 





Chubb 



Insurer 



US 



16 



12 



18 





Sompo 



Insurer 



JP 



16 



16 



19 





Tokio Marine 



Insurer 



JP 



16 



17 



20 





MS&AD 



Insurer 



JP 



16 



17 



20 





Samsung FM 



Insurer 



KR 



15 



17 



22 





The Hartford 



Insurer 



US 



16 



20 



23 





Travelers 



Insurer 



US 



16 

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20 



24 





Ping An 



Insurer 



CN 



22 



23 



25 





Liberty Mutual 



Insurer 



US 



22 



23 



26 





Lloyd’s 



Reinsurer 



UK 



24 



22 



27 





Berkshire Hathaway 



Reinsurer 



US 



25 



23 



28 





Everest Re 



Reinsurer 



BE 



25 



23 



28 





PICC 



Insurer 



CN 



25 



23 



28 





Sinosure 



Insurer 



CN 



25 



23 



28 





Starr 



Insurer 



US 



25 



23 



28 





WR Berkley 



Insurer 



US 



25 



23 



28 




In the assessment of fossil fuel insurance policies, Allianz leads the rankings for its comprehensive approach, with Generali, Aviva, and Swiss Re following closely behind.

When evaluating coal Insurance, Allianz stands as the sole company with a perfect 10/10 score, followed by AXA, Swiss Re, and Generali, illustrating their prominent policies in this sector.

Concerning oil & gas insurance, Aviva and Generali showcase robust limitations, though their scores are at 4.0/10. Notably, these companies, alongside German insurers Allianz, Hanover Re, Talanx, and Munich Re, positioned at 3rd, 4th, 6th, and 7th places respectively, have ceased new insurance for oil and gas production with few major exceptions.

However, none of the 30 insurers have terminated coverage for new gas power plants, and only a minimal few have withdrawn support for the upcoming surge of liquefied fossil gas (LNG) terminals.

“Insurers talk a lot about the need for oil and gas companies to transition away from fossil fuels. In reality, they are not advocating for a transition away from fossil fuel extraction but are satisfied if fossil fuel companies adopt shallow net zero commitments, shift from coal to gas extraction, invest in renewable energy projects and reduce their operational emissions. This does nothing to reduce the climate impact of burning the oil and gas these companies sell, which is by far the biggest part of their life-cycle emissions,” the scorecard said.

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