Lloyd's of London insurers dominate fossil fuel project underwriting

Written by Adam Cadle

09/11/2023

Insurers operating in the Lloyd’s of London market are the world’s biggest underwriters of fossil fuel projects, research published by Insure Our Future has found.

In its annual “scorecard” on 30 major insurers and their involvement in fossil fuels, Insure Our Future said insurers on the Lloyd’s market collectively have an estimated $1.6bn to $2.2bn in annual premiums, it found. Among the biggest Lloyd’s names are Hiscox and Beazley.

Insuring coal, oil or gas projects earned the industry about $21.25bn last year, according to research commissioned for the report from Insuramore, a market intelligence firm.

The top 10 individual insurers of fossil fuel projects are the Lloyd’s insurer Aegis, the People’s Insurance Company of China, Russia’s Sogaz, Germany’s Allianz, France’s Axa, Canada’s Fairfax Financial, Switzerland’s Zurich and the US insurers Chubb, W.R. Berkley and AIG.

Insure Our Future said most insurers continued to support projects to boost oil and gas production, even though they were incompatible with the 1.5C Paris climate target.

Peter Bosshard, global coordinator of the campaign, said: “Most insurance companies continue to ensure new oil and gas projects – pipelines, [liquefied natural gas] terminals and gas-fired power plants – which will lock in demand for decades to come – at a time when the climate crisis is escalating and when insurance companies are withdrawing from many regions because they consider the climate risks too high.”

The UK’s Aviva and Italy’s Generali have put the strongest limits on oil and gas insurance, and along with the German insurers Allianz, Hannover Re, Talanx and Munich Re, have ceased insuring new oil and gas extraction without major exceptions.

However, none of the 30 insurers ranked in the report have ended cover for new gas power plants, and almost none have ended support for a wave of new LNG terminals.

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