LONDON/FRANKFURT - A United Nations-convened climate alliance for insurers suffered at least three more departures on Thursday including the group’s chair, as insurance companies take fright in the face of opposition from US Republican politicians.
At least seven members of the Net-Zero Insurance Alliance (NZIA), which was launched in 2021, have now left including five of the eight founding signatories.
Departures on Thursday included AXA, whose group chief risk officer Renaud Guidee had chaired the alliance. The French insurer said in a statement it was leaving to “continue its individual sustainability journey”. Germany’s Allianz and French reinsurer Scor also quit.
NZIA, part of the Glasgow Financial Alliance for Net Zero set up by UN climate envoy Mark Carney, requires members to commit to reducing their greenhouse gas emissions.
The group has been buffeted by growing political opposition from some Republicans in the United States, who say the group could be violating antitrust laws by working together to reduce clients’ carbon emissions.
This month, 23 US state attorneys-general told NZIA members that the group’s targets and requirements appeared to violate both federal and state antitrust laws.
They gave insurers a month to respond in a May 15 letter – the latest salvo from the Republicans against financial institutions factoring environmental, social and governance-related (ESG) factors into their decision-making.
NZIA members held talks on Thursday to discuss the alliance’s options, sources familiar with the group said.
Mr John Neal, chief executive of Lloyd’s of London, which is a member, told Reuters on Wednesday the alliance needed to make its membership rules less prescriptive or risk falling apart.
An NZIA spokesman did not respond to requests for comment.
According to the NZIA website, it still has 23 members including Aviva, Lloyd’s and Tokio Marine Holdings. Most of those that have left have sizeable US businesses but so do some of those still in.
“We must wonder whether their ditching of the alliance has more to do with fears of losing business in the US than real legal jeopardy,” said Mr Patrick McCully, senior analyst at campaign group Reclaim Finance.
“Real climate leaders need to fight climate denial, not cave in to it. What is crucial now is that insurers do not reverse their existing climate pledges. If they cannot act together, they must act alone.”
While other financial industry alliances including one for banks have not suffered many departures, the exit of so many of the world’s biggest insurers is a blow to UN-led efforts to harness the power of coalescing financial institutions to try and drive emissions lower.
Legal experts told Reuters it would be difficult to make a legal case using antitrust rules against a company collaborating on tackling climate change through an alliance.
The political backlash in parts of the US had made insurers particularly sensitive to such accusations, they say.
Insurers that have left the NZIA – including Swiss Re, Munich Re, Zurich Insurance and Hannover Re – say their exits will not change their individual commitments to addressing climate change.
Allianz said in an e-mailed statement on Thursday it had decided to leave the NZIA and would stick to its own climate goals.
Scor’s new CEO Thierry Leger announced its exit at its annual general meeting earlier on Thursday alongside some new climate and energy transition policies. A Scor spokesman declined to provide any reason for the departure. REUTERS
