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Climate Alliance Sounds Alarm on ‘Political Attacks’ on Insurers

By Tommy Wilkes | May 26, 2023
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“Political attacks” are interfering with insurers’ efforts to price climate risks, the Glasgow Financial Alliance for Net Zero said on Friday, after a wave of insurers quit an industry climate group following pressure in the United States.

“These political attacks are now interfering with insurers’ independent efforts to price climate risk, which will harm policyholders, main street investors and local economies,” a spokesperson for GFANZ, a United Nations-backed coalition of financial institutions launched by ex-Bank of England Governor Mark Carney, said in a statement.

Allianz, AXA and SCOR, three of Europe’s biggest insurance firms, on Thursday became the latest insurers to quit the Net-Zero Insurance Alliance following accusations from some U.S. Republican Attorneys General that they are violating antitrust laws.

UPDATE: ESG-Bashing Triggers More Defections From Insurer Climate Group

Japan’s SOMPO Holdings, a major Asian insurer, was no longer on the list of members on NZIA’s website on Friday. It would be the first insurer outside of Europe to quit the alliance. A SOMPO spokesperson did not immediately respond to a request for comment.

The exodus of some of the world’s biggest insurers has raised questions about the viability of the NZIA, which was established in 2021. Lloyd’s of London CEO John Neal told Reuters this week the alliance needed to make its membership rules less prescriptive, or it risked falling apart.

NZIA members held several calls this week on the alliance’s options, sources say.

Some Republican politicians have mounted a campaign against financial institutions collaborating to try and rein in carbon emissions, part of a broader push back against businesses using environmental, social and governance-related factors in their decision-making.

Vanguard, one of the world’s biggest asset managers, in December left another alliance for fund managers, citing a need for independence, although other GFANZ groups have largely withstood the pressure.

According to the NZIA website, it now has 23 members including Aviva, Lloyd’s of London and Tokio Marine Holdings.

Lloyd’s of London CEO Neal Calls for Rethink of UN Climate Alliance Rules

Legal experts say it would be hard to make a legal case against insurers for breaching antitrust laws, and the NZIA has sought legal advice when setting requirements for members. But insurers are worried about a showdown with Republicans mounting a high-profile campaign.

Consumers’ Research, an activist group that has been highly critical of ESG policies, said on Thursday it would use a mobile billboard outside of NZIA members’ U.S. offices to pressure them to quit.

Most of those to have left the NZIA have sizeable U.S. businesses, but so do some of those still in the group. Some of the insurers to have quit also remain part of other GFANZ alliances.

“Despite these political headwinds, we will continue to support insurers’ efforts to manage climate risk and develop transition plans,” the GFANZ spokesperson said in the statement.

GFANZ, co-Chaired by Carney, was launched in 2021 ahead of the U.N. climate summit, COP26, in Glasgow.

(Reporting by Tommy Reggiori Wilkes; editing by Simon Jessop and Conor Humphries)

Related:

  • Anti-ESG Rhetoric in U.S. Prompts Urgent Talks as Insurers Quit Climate Coalition
  • Swiss Re Becomes Fourth Insurer to Leave Net Zero Group
  • Insurers Latest Target of U.S. AGs ESG Antitrust Concerns
  • Hannover Re Latest Company to Leave Net-Zero Insurance Alliance
  • Viewpoint: D&O Market Conundrum — Softening Rates With Rising Claims Severity
  • Zurich Exits Insurance Climate Alliance, Days After Munich Re
  • Companies That Form Global Climate Alliances Need Antitrust Guidance: Experts
  • Munich Re Exits Insurance Climate Group, Citing ‘Material’ Legal Risks
Copyright 2023 Reuters. Click for restrictions.

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Written By Tommy Wilkes

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  • Categories: International & Reinsurance NewsTopics: Allianz, AXA, Climate Change, environmental social and governance (ESG) criteria, Glasgow Financial Alliance for Net Zero (GFANZ), global warming, Hannover Re, Lloyd's, Munich Re, net zero emissions, Net-Zero Asset Owner Alliance, Net-Zero Insurance Alliance (NZIA), reinsurer, SCOR, Swiss Re, Zurich Insurance
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