{"id":2406,"date":"2021-11-03T06:25:06","date_gmt":"2021-11-03T06:25:06","guid":{"rendered":"http:\/\/insureourfuture.co\/?p=2406"},"modified":"2021-11-03T06:25:06","modified_gmt":"2021-11-03T06:25:06","slug":"insurers-support-for-oil-and-gas-undermines-climate-targets","status":"publish","type":"post","link":"https:\/\/japan.insure-our-future.com\/en\/2021\/11\/03\/insurers-support-for-oil-and-gas-undermines-climate-targets\/","title":{"rendered":"Insurers\u2019 support for oil and gas undermines climate targets"},"content":{"rendered":"

Coal industry nearly uninsurable as U.S. & Bermuda companies provide last lifeline\u00a0<\/span><\/h2>\n

The global insurance industry is undermining efforts to meet climate targets by continuing to support new oil and gas production, the Insure Our Future campaign reveals today in its fifth annual scorecard on insurers\u2019 climate policies<\/a>.<\/span><\/p>\n

Only three insurers, France\u2019s <\/span>AXA<\/b>, Italy\u2019s <\/span>Generali<\/b>,<\/span> and Australia\u2019s <\/span>Suncorp<\/b>, have adopted policies to stop insurance for much or all new oil and gas production projects, despite warnings from the International Energy Agency and Intergovernmental Panel on Climate Change that the planet cannot afford any fossil fuel expansion if it is to meet the 1.5\u00b0C Paris target.<\/span><\/p>\n

The industry is now coming under growing pressure to act. <\/span>UN Secretary General Antonio Guterres <\/b>told the Insurance Development Forum in September: \u201cWe need net zero commitments to cover your underwriting portfolios, and this should include the underwriting of coal \u2013 and all fossil fuels!\u201d<\/span><\/p>\n

While most insurers are stalling on oil and gas, the industry’s exit from the coal sector continues at a rapid pace, with tangible results. Since 2017, 35 insurers have withdrawn cover from coal, up from 23 a year ago, including over 50% of the global reinsurance market. Coal companies now face soaring premiums, reduced coverage and longer searches to find insurance. U.S. and Bermuda insurers provide the last lifeline to an increasingly un-insurable industry.\u00a0\u00a0<\/span><\/p>\n

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Peter Bosshard<\/h4>
Global Coordinator of Insure Our Future<\/div> <\/div>\n
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\u201cThe insurance industry is abandoning climate leadership by continuing to underwrite new oil and gas projects. The scientific consensus is clear: we cannot avoid a climate catastrophe if we expand fossil fuel production. Insurance companies need to follow the science and stop insuring all new coal, oil and gas projects if they want to regain their credibility as climate leaders.\u201d\u00a0<\/p>\n <\/div>\n<\/div>\n

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Sheldon Whitehouse<\/h4>
U.S. Senator of Rhode Island<\/div> <\/div>\n
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\u201cU.S. insurers continue to underwrite new oil and gas projects and invest in fossil fuel assets that pose a massive risk to the future of the planet, as well as to the insurance industry itself. Insurers hold a lot of influence over the future of fossil fuels, and they have an opportunity to help lead the planet to safety.\u201d\u00a0<\/p>\n <\/div>\n<\/div><\/blockquote>\n

The insurance industry has a unique power to drive the transition to a low-carbon economy by aligning its business with a pathway to prevent a rise in global temperature above 1.5\u00b0C. <\/span>Insuring Our Future: The <\/span><\/i>2021 Scorecard on Insurance, Fossil Fuels and Climate Change<\/span><\/i><\/a>, focuses on 30 of the world\u2019s top insurers. It is published by 26 organizations from 14 countries and will be launched today at the COP26 UN Climate Summit in Glasgow.<\/span><\/p>\n

Continued Industry Support for Oil and Gas Expansion\u00a0<\/b><\/h3>\n

While 14 insurers have tar sands exit policies, only 3 insurers have made moves on all oil and gas, despite scientific consensus on the need to end all fossil fuel expansion.<\/span><\/p>\n

Four founding members of the Net-Zero Insurance Alliance (NZIA) \u2014 AXA, <\/span>Allianz, Munich Re<\/b>, and <\/span>Zurich<\/b> \u2014 provide more than 20% of all oil and gas insurance despite committing to align their underwriting portfolios with a 1.5\u00b0C pathway. AXA\u2019s new policy allows it to continue insuring more than half of planned oil and gas expansion.<\/span><\/p>\n

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Lucie Pinson<\/h4>
Executive Director of Reclaim Finance<\/div> <\/div>\n
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\"It\u2019s a mark of shame that none of the members of the Net Zero Insurers Alliance have heeded the call from climate scientists and the IEA to end insurance for new oil, gas and coal projects. Even the new policy from its chair, AXA remains a long way from what science demands, despite constituting a step in the right direction. NZIA members have a special responsibility to lead from the front on climate - we call on them and all other insurers to match and exceed AXA's commitment by ending support for the expansion of all fossil fuel production.\"<\/p>\n <\/div>\n<\/div><\/blockquote>\n

Just <\/span>10 insurers <\/span><\/a>control about 70% of the global oil and gas insurance market<\/span>. AIG, Travelers, Zurich, Allianz, Chubb <\/b>and<\/span> Liberty Mutual<\/b> could together end more than half the underwriting of the industry.\u00a0<\/span><\/p>\n

The 18.5 billion USD insurers receive in annual premiums from oil and gas is only a drop in the bucket compared to their overall revenue, and there are growing financial incentives to act. French bank Soci\u00e9t\u00e9 G\u00e9n\u00e9rale has reported that insurers with strong coal and ESG policies are adding billions to their value, and that \u201creducing exposure to oil and gas\u201d could \u201cunlock an additional \u2018<\/span>green premium<\/span><\/a>\u2019 for the sector.\u201d<\/span><\/p>\n

Global Progress on Coal\u00a0<\/b><\/h3>\n

European insurers continue to lead the way on coal. Lloyd\u2019s of London, the last major European insurer to cover new coal projects, adopted a climate policy in December 2020, although it <\/span>allows for continued<\/span><\/a> coverage of existing coal, tar sands and Arctic projects until 2030.\u00a0<\/span><\/p>\n

Japanese and Korean insurers are starting to follow Europe\u2019s lead and have stronger policies than most U.S. insurers. <\/span>MS&AD <\/b>and<\/span> Tokio Marine<\/b> are the first Japanese insurers to end underwriting for most new coal projects. Six Korean insurers have ended insurance for coal plants, following <\/span>Samsung Fire and Marine\u2019s<\/b> action last year.<\/span><\/p>\n

Chinese insurers remain laggards, but the Chinese government\u2019s decision to stop building coal power plants overseas likely spelled the end of their support for new coal projects outside China.<\/span><\/p>\n

This retreat is having a significant impact on coal companies worldwide. For example:<\/span><\/p>\n