Despite soaring payouts for climate-related disasters, the global insurance industry continues to back projects to increase oil and gas production, the Insure Our Future campaign said in a new report on Wednesday.
Fossil fuel insurance earned the industry around $21.25 billion in 2022, according to research commissioned for the report from market intelligence firm Insuramore.
The top ten individual fossil fuels insurers include AEGIS, Chubb, Allianz, AXA, Fairfax Financial, Zurich, W. R. Berkley, and AIG, the report found.
“Although some insurers have introduced significant restrictions on fossil fuels, none are aligned with the 1.5°C Paris target and overall, the industry’s response to climate emergency is totally inadequate,” the authors of the report wrote.
“To highlight this, the three top spots of this year’s scorecard are left empty for the first time.”
Some insurers and reinsurers have restrictions in place on backing fossil fuel industries, especially coal, but many of the oil and gas restrictions that insurers have adopted “are extremely limited in scope,” the report found.
The report’s top recommendation to insurers is “Immediately cease insuring new and expanded coal, oil, and gas projects.”
“Insurers talk a lot about their climate commitments and supporting their clients through the energy transition, but this is plain greenwashing. They are still profiting from providing cover that allows companies to develop new fossil fuel projects,” said Ariel Le Bourdonnec, Insurance Campaigner at Reclaim Finance.
“Insurers could be a force for change, but instead they are undermining climate action.”
Fossil fuel financing and insurance have come under scrutiny in recent years as ESG policies have become mainstream for many companies and investors.
Climate change is the single largest motivation of investment institutions to decide to exclude companies from their portfolios, a newly launched ‘exclusion tracker’ showed last month.
Pension funds and other institutional investors in Europe have excluded some major oil and gas companies from their portfolios, while some European banks have scaled back financing for fossil fuel projects.
By Tsvetana Paraskova for Oilprice.com