Several major names decided to leave the alliance in recent weeks
Reclaim Finance senior analyst Patrick McCully has urged insurers to “not reverse their exisiting climate pledges” as several major names decided to leave the Net Zero Insurance Alliance (NZIA) in recent weeks.
The alliance has so far lost more than a dozen members, with Lloyd’s of London revealing itself as the latest firm to withdraw in a statement released last week (26 May 2023).
Others to leave, including five of the eight founders, were Munich Re, Zurich, Hannover Re, Swiss Re, Tokio Marine Holdings, Axa, Allianz, Scor, Sompo Holdings, QBE, Grupo Catalana Occidente and MS&AD Insurance Group Holdings Inc.
The string of departures came as Republican politicians in the US rose concerns in a letter to NZIA members earlier this month (15 May 2023), alleging an activist climate agenda was being advanced which they believed led to increased costs and financial hardship not only in insurance but across the board.
It also highlighted that under the nation’s antitrust laws, certain arrangements among business competitors were “strictly forbidden because they are unfair or unreasonably harmful to competition”.
McCully said that “as the NZIA disintegrates before our eyes, we must ask why these huge companies with their hordes of lawyers did not see antitrust issues as a major obstacle when they founded the alliance”.
’What is crucial’
The NZIA – a United Nations-convened climate alliance for insurers – was founded in July 2021 by Axa (NZIA chair), Allianz, Aviva, Generali, Munich Re, Scor, Swiss Re and Zurich Insurance Group.
Read: United Nations’ NZIA launches inaugural target-setting protocol
Read: Axa’s new oil and gas policy has ‘derailed’ its net zero ambitions – Reclaim Finance
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It forms part of the Glasgow Financial Allianz for Net Zero (GFANZ) – established by UN special envoy on climate action and finance Mark Carney in April 2021 – and was created to help (re)insurers transition their underwriting portfolios to net zero greenhouse gas (GHG) emissions by 2050.
McCully said that he wondered ”whether [members’] ditching of the alliance has more to do with fears of losing business in the US than real legal jeopardy”.
“Real climate leaders need to fight climate denial, not cave to it,” he said.
“What is crucial now is that insurers do not reverse their existing climate pledges.
“If they cannot act together, they must act alone.”
Insurer statements
Prior to Republican politicians raising concerns in their letter, Munich Re said in a statement on 31 March 2023 that it discontinued its membership as ”the opportunities to pursue decarbonisation goals in a collective approach among insurers worldwide without exposing ourselves to material antitrust risks are so limited, that it is more effective to pursue our climate ambition to reduce global warming individually.”
QBE, meanwhile, announced on 26 May 2023 that following its departure, it “will continue to work with our stakeholders to deliver on our broader sustainability strategy”.
And Lloyd’s stated it will “continue to support the UN’s principles for sustainable insurance and sustainable development goals and remain committed to delivering our sustainability strategy including supporting the global economy’s transition”.
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