Allianz, AXA and Axis best performers in climate change underwriting ranking

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Allianz, AXA and Axis Capital rank as the top three insurers for fossil fuel underwriting commitments in a new scorecard by climate change campaign group Insure Our Future, with AXA and Scor joint top when it comes to investment, followed by Allianz.

The scorecard ranks 30 leading insurers on fossil fuel underwriting, investment and other climate leadership. It is based on survey responses from 17 of the companies and on publicly available information where insurers failed to reply.

It finds that Allianz is leading on ending fossil fuel insurance, with a score of 4.7 out of 10. AXA is in second on 4.6 and AXIS Capital is third on 3.9. The score mostly reflects moves to stop covering coal, with Insure Our Future noting that only AXA and Generali have adopted restrictions on conventional oil and gas.

The top ten insurers for fossil fuel underwriting is completed with Swiss Re in fourth, followed by Zurich, Hannover Re, Mapfre, Generali, Scor and QBE.

The scorecard takes into account new policies announced by AXA and Lloyd’s of London in the last few days.

AXA’s new restrictions on conventional oil and gas production increased its underwriting score, but only marginally as Insurance Our Future said the policy allows the company to continue insuring more than 50% of planned oil and gas expansion. The new policy saw AXA’s fossil fuel insurance score increase from 4.2 to 4.6. Its investment score increases from 4.4 to 5.4.

Insure Our Future said Japanese and Korean insurers are starting to follow Europe’s lead and have stronger coal policies than most US firms. Chinese insurers remain laggards. However, the Chinese government’s decision to stop building coal power plants overseas likely spells the end of their insurers’ support for new coal projects outside China, according to Insure Our Future.

Its scorecard ranks Lloyd’s 16th on underwriting with a score of just 0.9. Lloyd’s announced last week it is joining the Net-Zero Insurance Alliance (NZIA) and committed to transition its underwriting portfolio to net-zero greenhouse gas emissions by 2050 at the latest.

But Insure Our Future actually reduced Lloyd’s fossil fuel underwriting and investment scores following the news because it believes the market has actually removed concrete commitments for its syndicates, which are now able to decide individually how best to proceed.

Chubb is 19th in the underwriting ranking on 0.7 and AIG is joint last with a score of zero. Insure Our Future points out that AIG, Berkshire Hathaway, Convex, Everest Re, PICC, Sinosure, Travelers and W.R. Berkley have no fossil fuel underwriting restrictions at all.

Chinese insurers PICC and Sinosure also ranked joint last, but their future underwriting may be constrained by the Chinese government’s new commitments on coal, which is not currently reflected in their scores, said Insure Our Future.

When it comes to divesting from fossil fuels, Scor and AXA are joint top on 5.5, followed by Allianz in third on 4.4. Swiss Re, Zurich, AXIS Capital and Generali also score well.

Of the 30 companies, 19 have coal divestment policies. While 14 had some oil and gas restrictions, most were restricted to tar sands. Ten insurers have no fossil fuel divestment policies.

On other climate leadership metrics, Aviva, Allianz and AXA score highest in that order. They are among the eight founding members of the Net-Zero Insurance Alliance that have committed to align their underwriting and investments with a 1.5°C pathway.

Twenty insurers scored no points in this part of the scorecard, including all US and Asian insurers and Lloyd’s of London.

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