The world’s largest insurance companies are failing to meet the scale and urgency of global climate, nature and social crises, new research by ShareAction, supported by WWF, has revealed.
The research revealed that insurers are failing in their key responsibilities, with companies continuing to underwrite and invest in activities that drive climate change and biodiversity loss. Most insurers in the benchmark achieved D, E and F grades, with only a handful receiving C and B grades. The highest performing insurers were Allianz and Achmea, both awarded a B grade.
Louise Marfany, director of investor sector standards and policy at ShareAction, said: “Insurance exists to help people recover from disasters, yet this report shows many insurers are just adding fuel to the fire. Insurers shape the world we live in through the companies they underwrite and invest in. By enabling fossil fuel expansion, they are worsening the effects of climate change, leaving people and planet exposed to more frequent wildfires, hurricanes and floods.
“The climate crisis has created an uninsurability problem that the industry can’t afford to ignore. Yet, instead of addressing the roots of the problem, insurance companies continue to fuel it by underwriting and investing in the very activities that drive climate change and biodiversity loss.”
Lloyd’s of London managing agents were among the worst performers, falling significantly behind conventional insurers across most metrics in the benchmark. Among the 10 largest ‘independent’ managing agents, only 30% had any kind of upstream coal underwriting restriction, and none disclosed a 2050 net-zero target, compared with 80 and 64% respectively for conventional insurers.
European insurers achieved the strongest overall benchmark performance, likely reflecting more mature sustainability regulation in the EU. Asian insurers outperformed European and North American peers on biodiversity due to widespread adoption of the Taskforce on Nature-related Financial Disclosures (TNFD).
The research also revealed that 73% of insurers had no underwriting restrictions on upstream oil and gas expansion and 33% had none on coal.
Over 90% of insurers engaged in treaty reinsurance had no underwriting restrictions.
Just 10% of insurers disclosed that they integrate nature, or the risks created by its degradation, explicitly into catastrophe modelling.
Regula Hess, financial sector engagement lead at WWF Switzerland, said: "Insurers have a choice: they can hinder the transition to an economy in which people and nature thrive together by enabling oil and gas expansion or mining in protected areas, or they can accelerate this transition.
"Through underwriting and investing in renewable energy, sustainable agriculture and battery recycling, they can drive positive change. As risk managers, they can also help both their clients and municipalities better understand the physical risks we are facing and how best to prevent them, for example by promoting adaptation measures like wetland restoration and urban greening."
In the fourth edition of Insuring Disaster, ShareAction, evaluated and ranked 40 of the world’s largest property and casualty insurers, including 30 conventional insurers and 10 Lloyd’s of London managing agents, on their approach to key issues such as climate change, fossil fuel extraction, biodiversity loss, social risk and governance.
