Zurich Insurance pledges not to insure any future oil or gas projects

First reported by Bloomberg, Zurich Insurance has announced that it will no longer underwrite new oil or gas projects, as these investments fail to align with the insurer’s net zero by 2050 ambitions.

Related topics:  Zurich Insurance,  insuring the planet
Tabitha Lambie | Editor, Protection Reporter
8th April 2024
ESG Reporting
"Further exploration and development of fossil fuels isn’t required for the transition."
- Sierra Signorelli, Chief Executive of Commercial Insurance at Zurich Insurance

Last year, Zurich Insurance’s involvement with oil or gas projects generated $2.1bn in premiums – this equated to 7% of the insurer’s total commercial premiums. Projects included the fossil fuel infrastructure spanning North Sea drilling to US natural gas terminals.

New restrictions means the insurer will now have to ask it’s highest-emitting corporate customers to reduce their carbon footprints. Further details of the policy will be included in Zurich’s climate-transition plan, which will be announced later this year. This decision is limited to new fossil fuel projects, so Zurich will continue to underwrite existing ones.

Zurich plans to target sixty-five corporate customers this year that have the highest insurance-associated emissions, and later extend this to four-hundred-and-fifty of its largest customers by 2030.

In the meantime, Zurich wants all oil or gas customers to set interim emission targets, to make clear and measurable commitments, as well as present credible strategies to achieve net zero by 2050.

Sierra Signorelli, Chief Executive of Commercial Insurance at Zurich Insurance, said this policy was triggered by the disconnect between such activities and the insurer’s overall goal of achieving net zero emissions by 2050.

“Further exploration and development of fossil fuels isn’t required for the transition. We think it’s the right time to evolve our position,” she explained.

If Zurich doesn’t see real progress amongst contacted customers, “we would view exiting [them] as a path of last resort.”

Alongside these new measures, the insurer intends to provide more cover for newer forms of clean-energy infrastructure, including carbon capture and hydrogen power.

In April 2023, Zurich became the second insurer to quit the Net-Zero Insurance Alliance (NZIA), which is a member-led group that supports its members as they work towards decarbonising their undewriting portfolios. At the time, Zurich said “after establishing a standardized methodology for measuring and disclosing greenhouse gas (GHG) emissions associated to insurance and reinsurance underwriting portfolios, we want to focus our resources to support our customers with their transition.”

READ MORE: Zurich becomes second insurer to quit Net-Zero Insurance Alliance

Since making this move, Mario Greco, CEO of Zurich Insurance, has called similar climate alliances “political and bureaucratic.” He believes “every company needs to stand for what they believe in” and not “hide behind” alliances.

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