Most of the world’s largest insurers are failing to adequately address systemic risks such as climate change and biodiversity loss, but a group of five U.S. insurers are some of those that rank the lowest, according to report published by nonprofit ShareAction.

ShareAction gives the lowest mark—an E rating—to almost half (46 percent) of 70 of the world’s largest property/casualty and life and health insurers for their sustainability practices.

Five U.S. P/C insurers—Nationwide, Genworth Financial, American International Group, Allstate, and Chubb—appear in the bottom 10 of the ranking, each receiving the lowest score with their environmental, social and governance credentials (ESG). Two Chinese insurers—the People’s Insurance Co. Group of China (PICC) and China Pacific Insurance Company (CPIC) also sit within the bottom 10. The other three insurers in this group with the lowest ESG rankings are R+V Versicherung, Sony Financial Holdings and Powszechny Zaklad Ubezpieczen (PZU).

On the other hand, three European insurers—AXA, Allianz and Aviva—lead the ranking of P/C insurers, each receiving an A rating for their ESG scores from ShareAction, a London-based non-profit group that is working to build a sustainable global investment sector.

“All three have climate policies that cover their underwriting activity, as well as restrictions on financing coal companies and those in breach of human rights,” explained ShareAction.

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But even these three companies scored less than 50 percent overall, and “no insurer demonstrates leadership across its entire responsible investment and underwriting approach,” said the group in a press release accompanying the report.

Nine of the top 10 P/C insurers were European-based companies: AXA, Allianz, Aviva (all with A ratings), NN Group (with a BB rating), Canada’s Desjardins Insurance (B); Generali (B); Zurich Insurance (CCC); Swiss Re (CC); Munich Re (CC) and Achmea (CC).

“The stronger performance of European insurers is likely attributable to the strong regulatory signals on sustainable finance within Europe,” said the report. However, no insurance company that was evaluated received an AAA or AA rating.

Insurers’ current approach to responsible investment and underwriting is insufficient,” said the report titled “Insuring Disaster: A ranking of 70 of the world’s largest insurers’ approaches to responsible investment and underwriting,

Indeed, the report emphasized that much work remains to be done to raise the standard of responsible investment and underwriting, although some insurers are demonstrating leadership in particular areas.

“The scale and urgency of current ecological and social crises demand far more than a ‘business-as-usual’ approach from insurers…,” the report stressed.

“Despite the sector’s supposed expertise in managing risk, insurers continue to ignore the systemic risks of climate change and biodiversity loss.”

“Insurers are better placed than any other type of financial institution to exert pressure on unsustainable companies, as firms cannot operate without insurance. But they are largely failing to use this influence,” said the report’s author Felix Nagrawala, in a statement.

“Despite the sector’s supposed expertise in managing risk, insurers continue to ignore the systemic risks of climate change and biodiversity loss,” he added.

Restrictions on Coal Underwriting

In the press release, ShareAction said that coal finance is one of the few ESG issues that insurers are starting to address.

“Almost half the insurers with a property/casualty business were found to have policies restricting underwriting for the coal industry,” said ShareAction.

“These policies are starting to have real world impacts: BMD Group admitted this month that it had been unable to obtain insurance for its work on the controversial Adani coal mine in Australia,” said the release.

However, none of the assessed insurers have restrictions on conventional oil and gas, and only 19 percent exclude tar sands, shale oil or Arctic oil, said the report, adding that not a single insurer was found to have any restrictions for underwriting conventional oil and gas operations.

Further, it continued, only 45 percent of assessed insurers with a P/C business are using climate-related underwriting metrics, while just 19 percent are setting targets.

Underwriting Lags Behind Investment

ShareAction found that 11 insurers surveyed have net zero targets for their investment activity, but only two have set net-zero targets for their underwriting activities. “However, neither of these has published a clear plan outlining how they will achieve this,” the report said.

This reflects a general trend, it added, where insurers’ ESG performance on underwriting is consistently poorer than on investment activity.

Other findings in the report include:

  • Insurers’ boards are ill-equipped to appropriately manage the environmental and social impacts of their organizations. Indeed, for half of the insurers surveyed, ShareAction found no evidence of board-level involvement in responsible investment and underwriting.
  • There is poor board-level gender diversity, with only 25 percent female representation at board level.
  • The vast majority of insurers have not yet started to develop their approach to biodiversity loss.
  • Most of the world’s largest insurers show severe negligence of their impact on human and labor rights across their investment and underwriting activities.

While the report has a lengthy list of conclusions and recommendations for addressing climate change, human rights and biodiversity issues, a common theme for all these areas is the need to develop policies and set targets.


The report analyzes 70 of the most influential insurance companies worldwide across 15 countries, selected according to their total asset levels, said ShareAction. The final list includes 39 pure life and/or health insurers, and 31 P/C or insurers that operate in multiple business lines. The survey excluded brokers; insurers that focus on pension products; companies that operate independent insurance subsidiaries but mainly do business in other sectors, and subsidiaries of insurance companies where there is a parent company that operates predominantly in insurance.

A PDF version of the ShareAction report can be accessed here.

(This article was originally published on Wells Media sister site, Insurance Journal.)

Topics USA Carriers Profit Loss Europe Energy Oil Gas Underwriting China Climate Change Property Casualty