Insurers can underwrite dirty energy with impunity

Everest

09/11/2023 10:50

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are their own.)
       LONDON, Nov 9 (Reuters Breakingviews) - 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.
    
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Graphic: Insurers’ exposure to fossil fuel underwriting    https://tmsnrt.rs/47ufanv
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 (Editing by George Hay and Oliver Taslic)