Ditching investments in fossil fuel businesses—and denying them insurance—aren’t the only ways for the insurance industry to participate in the drive to net zero greenhouse gas emissions, according to representatives of global insurers and reinsurers.
Executive Summary"Carbon removal will need to evolve into a multitrillion-dollar industry akin to the value of the oil and gas industry today if we are to hit the climate targets set out by the 2015 Paris Agreement." The words of Christoph Nabholz, Chief Research Officer at Swiss Re Institute, are a call to action for insurers and reinsurers to support the emerging carbon removal industry.
Even those companies that are continuing to insure the oil and gas industry can push the global transition to net zero forward by helping facilitate the growth of essential carbon removal technologies, they say.
But the insurance market for carbon removal is still in its early stages, as insurers tread carefully given the lack of loss history in an emerging sector.
Some companies, such as Chubb, are continuing to insure oil and gas while also helping to push net zero transition. Chubb has exited the insurance of coal and tar sands, which have “true sustainability issues,” but is continuing to insure oil and gas because the world doesn’t yet have “great alternatives,” according to CEO Evan Greenberg, who spoke at the recent 38th Annual S&P Global Ratings Insurance Conference. (Related article, “Chubb Not Declaring Itself Net Zero, CEO Greenberg Says“) He said Chubb is developing products to support industries “that are either helping companies and individuals reduce their carbon footprint or create new technologies that produce energy that are carbon free.”
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