Swiss Re plans to phase out oil and gas coverage
From July 2023, Swiss Re will no longer provide covers for the oil and gas companies that produce the most carbon
Swiss Re has unveiled an enhanced oil and gas policy, which commits its shift away from the most carbon-intensive oil and gas production.
From July 2023, the reinsurance giant will no longer provide individual insurance covers for oil and gas companies that are responsible for the world’s 10% most carbon-intensive oil and gas production.
This would mark an intensification of its previous initiative, launched in 2021, to cease providing individual insurance cover for oil and gas companies that are responsible for the world’s 5% most carbon-intensive oil and gas production.
Swiss Re’s policy is the latest among a number of its counterparts that have recently adopted oil and gas exit policies.
Last week, both Hannover Re and Mapfre, which together account for 11% of global non-life reinsurance premiums, adopted significant oil and gas policies.
Swiss Re also recently announced it would no longer re/insure or directly invest in new oil and gas field projects that will receive the go-ahead from their parent companies after 2022. Exceptions will apply to projects of companies aligned with net-zero emissions by 2050.
The Swiss giant said it will partner with its oil and gas clients on the transition to net-zero emissions and will align its re/insurance support to companies according to a set of pre-determined ambitions.
By 2025, half of Swiss Re’s overall oil and gas premiums are to come from companies that are aligned with net zero by 2050. And by 2030, its oil and gas re/insurance portfolios will contain only companies that are aligned with net zero by 2050.
In addition, from July 2022 Swiss Re will no longer re/insure or invest in companies and projects with more than 10% of their production located in the Arctic Monitoring And Assessment Programme region, though Norwegian production is exempt.
The company is also developing an approach for oil and gas in treaty reinsurance, to be finalised by 2023.
Climate lobby group Insure Our Future said Swiss Re’s move “sends a strong message to fossil fuel companies, investors and governments: oil and gas operations need to be phased out in accordance with climate science or they may become uninsurable by the end of the decade”.
Insure Our Future called on Munich Re, Lloyd’s and Scor, which together account for 26% of the global reinsurance market, to make commitments "which build on Swiss Re’s approach" by the time of their annual general meetings.