In a significant development, 8 of the world’s top insurance and reinsurance companies, including Europe’s top three insurers by premiums, Allianz, AXA and Generali, have launched a partnership to help speed up the transition towards a net zero emissions economy.
The alliance known as the Net-Zero Insurance Alliance (NZIA) would work to shift underwriting portfolios towards net-zero greenhouse gas emissions by 2050.
The development comes in the wake of insurers coming under increasing pressure to spell out how they plan to de-carbonize their businesses midst growing calls to stop underwriting and investing in fossil fuel projects by investors.
Each of the companies will individually set intermediate targets every five years and report on progress annually in cooperation with competition authorities, said the NZIA member in a statement.
“With this new Net-Zero Insurance Alliance, we are raising our climate ambition further,” said Thomas Buberl, Chief Executive of the AXA Group, which chairs the NZIA.
NZIA members, also includes SCOR, Aviva, Swiss Re, Munich Re, and Zurich Insurance Group, will set underwriting criteria for the most carbon-intensive activities in their underwriting portfolios and offer solutions for low-emission and zero-emission technologies.
They will also include net-zero and decarbonization risk criteria in their risk management frameworks.
“By committing to join the gold standard alliance for net zero, the (NZIA) will ultimately make underwriting contingent on underlying companies having credible net-zero transition strategies,” said Mark Carney, the UN’s climate envoy.
Already many leading Europe-based insurers have adopted climate-friendly policies with Generali pledging last month to reach carbon neutrality in its direct investment portfolio by 2050.