Insurers disasters
Source: Middle East Insurance Review | May 2024
Both, people and planet, face the triple whammy from insurance companies underwriting and investing in projects that are increasing global warming, damaging the natural environment and failing to protect human rights according to a recent investigation report.
The 115-page Insuring Disaster 2024 report published by investment charity ShareAction in April 2024 investigates world’s 65 largest insurance companies on the role they play in supporting businesses with negative social and environmental impacts and shows how the lack of comprehensive policies in the sector is leading to support for increased fossil fuel production and the destruction of vital?ecosystems for agriculture or mining.
Among the most shocking findings from the research included:
- Only two of the insurers investigated have committed to rule out underwriting four of the world’s most controversial fossil fuel projects.
- Two thirds of the insurers fail to exclude underwriting for companies producing controversial armaments, such as chemical weapons and cluster bombs.
- 30% of insurers assessed scored 0 for policies that would protect the natural environment and biodiversity.
The report sets out how despite the insurance sector paying out over $100bn a year for the last four years in claims related to the impact of global warming, including increased flooding, storms and fires, insurers continue to invest in and underwrite the causes of catastrophes.
ShareAction head of financial sector research Claudia Gray said, “This reveals the insurance sector’s abject failure to live up to its responsibilities to protect both people and planet. They have both a moral duty and business opportunity to adopt responsible investments and underwriting activities.”
The report analyses the insurers under three categories - property and casualty insurers, life and health insurers and Lloyd’s of London managing agents. The insurers in each of the three business categories are rated from best to worst scoring them across 30 main standards.
Just two institutions received more than half the available points in the survey, both based in France: AXA Group (52%) in the property and casualty ranking; and CNP Assurances SA (51%) in the life and health ranking.
Lloyd’s of London (UK) was among the worst performers, coming third from the bottom for its group policies. Almost half of its major managing agents failed to achieve a single key standard, including Aegis Managing Agency which scored 0% in the survey. M