After Swiss Re, Munich Re tightens oil and gas policies, now all eyes on SCOR
Global reinsurance giant Munich Re, one of the world’s largest, has tightened its oil and gas investment and underwriting policies, describing it as an “environmentally conscientious” business decision.
Munich Re has committed that as of April 1, 2023 it will no longer invest in or insure contracts/projects exclusively covering the planning, financing, construction or operation of new oil and gas fields.
The move follows the momentum set by the likes of Allianz, Swiss Re and has garnered praise from environmental activists. Munich Re’s syndicate at Lloyd’s recently committed to stop underwriting all traditional oil and gas business by January 1, 2023.
Swiss Re pledged earlier this year that from July 2023 it will no longer provide individual insurance covers for those oil and gas companies that are responsible for the world's 10% most carbon-intensive oil and gas production.
The German reinsurer Munich Re said that it has set itself ambitious decarbonisation targets for its investments, its re/insurance transactions and its own business operations. This applies to direct illiquid investments, primary, facultative and direct (re)insurance business, as well as where such risks are contained or bundled in one cover together with other risks (e.g., existing oil or gas fields), when the cover is mainly designed to protect one or more of such new risks.
Furthermore, in its own listed equities & corporates portfolio, as of April 1 2023, Munich Re will cease to conduct new direct investments in pure-play Oil & Gas companies. As of January 1, 2025, Munich Re will require a credible commitment to net-zero greenhouse gas emissions by 2050 including corresponding short- and mid-term milestones from listed integrated O&G companies with the highest relative and absolute emissions.
The Insure Our Future campaign described Munich Re’s policy as a “significant step and a clear signal to the global insurance market”, hinting more specifically at French reinsurer SCOR, to immediately exit new oil and gas.
“We welcome that Munich Re is catching up with the leading insurers on climate by ruling out support for new oil and gas fields, new oil infrastructure and new oil plants. We would have wanted to see bolder steps on gas, but at least with this policy the world's largest reinsurer has now shown that it's starting to take its own climate warnings seriously,” said insurance campaigner, Regine Richter.
Lindsay Keenan, European coordinator of Insure Our Future, said: “Munich Re's policy sends a message to the wider insurance industry and to the oil and gas sector that they must act urgently to align their business with climate science and the 1.5C climate target or risk not being able to find reinsurance cover.”
Ariel Le Bourdonnec, insurance campaigner at Reclaim Finance, said: “The French reinsurer SCOR, remains one of the last major European reinsurers without a robust policy against oil and gas expansion. SCOR must follow Munich re and rapidly improve its oil and gas policy by committing to stop covering new upstream oil and gas projects.”
Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.
