“If insurance companies took climate science seriously, they would fully align their underwriting and investment strategies with a credible 1.5°C pathway,’ says global coordinator
Insurers operating in the Lloyd’s of London market are collectively the world’s biggest fossil fuel underwriters, according to new research by campaign group Insure Our Future.
In its annual scorecard, which was published yesterday (9 November 2023), the group claimed that most insurers were supporting projects increasing oil and gas production and, as a result, were ”continuing to fuel the climate emergency”.
According to research commissioned for the report from Insuramore, fossil fuel insurance earned the industry around $21.25bn (£17.3bn) in 2022, with insurers in the London market taking an estimated $1.6-$2.2bn in annual premiums.
“The insurance industry first warned about climate risks in 1973 and these have now become a grim reality, particularly for low-income countries and communities which have contributed least to the climate emergency,” Peter Bosshard, global coordinator of the Insure Our Future campaign, said.
”Insurance companies are now abandoning customers affected by climate risks, yet they continue to fuel the climate crisis by underwriting and investing in the expansion of fossil fuels.”
The organisation’s warning came after several major names decided to leave the Net Zero Insurance Alliance (NZIA) earlier this year (31 May 2023).
This was despite the growing frequency and severity of floods, hurricanes, wildfires, droughts and other climate-related disasters seeing insurance payouts for natural catastrophes soar to an average $110bn (£89m) a year since 2017, according to the scorecard.
And it warned that an increase of fossil fuel consumption and CO2 emissions ”will completely destroy our chances of limiting global warming to 1.5°C”.
Insure Our Future has now urged the insurance industry to act to support the 1.5°C climate target.
“If insurance companies took climate science seriously, they would fully align their underwriting and investment strategies with a credible 1.5°C pathway and end all support for increased fossil fuel production,” Bosshard said.
”They would be suing fossil fuel companies, to make polluters pay for the growing costs of climate disasters and keep insurance affordable for climate-affected communities.”
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