Late last year, Lloyd’s of London announced plans to stop selling insurance for some types of fossil fuel companies by 2030. In the world of insurance, it was a huge move: the centuries-old institution not only took a clear stand in the industry’s debate on climate change, it also cast doubt on the value of the business it intends to give up. And Lloyd’s isn’t the only one with concerns about the future of fossil fuel. Insurers and reinsurers around the world are grappling with issues related to both climate change and the impact of energy transition on their portfolios. Some have made the same commitment that Lloyd’s did, and others are likely to follow.
How the Insurance Industry Could Bring Down Fossil Fuels
Facing billions of dollars in losses, insurers are starting to ditch carbon-producing energy — but they’re still tentative about renewables.
May 27, 2021
Illustration by Valerie Chiang
Summary.
A growing number of insurance companies are cutting ties with the fossil fuel companies they used to cover. New insight from data analytics firm Verisk finds that over 30 years, insurers sustained roughly $60 billion in onshore and offshore large risk losses from fossil fuel companies, with only another $30 million or so coming from other companies. The author urges a push toward renewables, examining the obstacles leading to industry hesitancy and how it might overcome them.