Insurers’ restrictions on oil and gas are finally starting to catch up with those on coal, according to a new data report from the Insure Our Future campaign, with 62% of reinsurers having coal exit policies and 38% now having oil and gas exclusions.
The data comes from Insure Our Future’s annual scorecard, which ranks the world’s top 30 fossil fuel insurers on the quality of their fossil fuel exclusion policies.
At the time of last year’s COP, only Suncorp, Generali and AXA had introduced restrictions on insuring conventional oil and gas projects, the report said.
However, over the past year Allianz, Aviva, Fidelis, Hannover Re, KBC, Mapfre, Munich Re, SCOR, Swiss Re and Zurich have followed suit, bringing the total number of policies to 13.
As a result, the market share of insurers with oil and gas restrictions has increased from 3% to 38% for reinsurers and from 5% to 15% for primary insurers.
It also adds that 18 insurers have excluded support for Canada’s Trans Mountain pipeline and 16 have pledged not to participate in the East African Crude Oil Pipeline.
The report finds that this year Allianz, AXA and Axis Capital are the best performers on their coal exit policies, while Aviva, Hannover Re and Munich Re top their oil and gas exit policies.
At the bottom of the fossil fuel rankings is a group of insurers that have yet to impose restrictions on covering coal, oil or gas projects, including US insurers Berkshire Hathaway, Starr and Bermudian airline Everest Re.
The report also notes that UK company Lloyd’s of London also fares very poorly after announcing a coal phase-out framework for 2020 but then backing down and making it optional.
Liberty Mutual, Chubb and Tokio Marine have imposed some restrictions on coal, the report said, but are actively safeguarding oil and gas industry expansion.
Chinese insurers PICC and Sinosure have not imposed restrictions on fossil fuels, but will no longer cover new overseas coal-fired power plants, according to Chinese government policy.
Peter Bosshard, global coordinator of the Insure Our Future campaign and lead author of the
Scorecard, commented: “Insurance is the Achilles heel of the fossil fuel industry and has the power to accelerate the clean energy transition.
“All insurance companies must immediately align their businesses with the 1.5 degree target of the Paris Agreement and stop insuring new coal, oil and gas projects.”
The report notes that Munich Re, Swiss Re and Allianz have adopted ambitious policies with pledges to uninsure most or all new oil and gas exploration projects.
It also notes that while the number of oil and gas restrictions is increasing, the quality varies widely, with Aviva and Hannover Re having the strongest policies but not being big players in the oil and gas sector.
In contrast, AXA and Zurich, both of which are major oil and gas insurers, according to the report, took only minor steps with commitments to end insurance for oil exploration but not for new oil production or for gas exploration or production.
Meanwhile, major fossil fuel insurers like AIG, Chubb, Lloyd’s and Tokio Marine have yet to impose restrictions on conventional oil and gas.
