Zurich Insurance to Halt Underwriting New Oil and Gas Projects in Sustainability Push (FinTech Global)

Zurich Insurance to Halt Underwriting New Oil and Gas Projects in Sustainability Push

Tuesday, April 9th, 2024 Insurance Industry Risk Management Technology

Zurich Insurance Group AG has announced a significant shift in its underwriting policy, stating it will no longer underwrite new oil and gas projects. This decision is a cornerstone of the insurer’s strategy to achieve net zero emissions by 2050, showcasing a firm commitment to environmental sustainability. According to Sierra Signorelli, Chief Executive of Commercial Insurance at Zurich, the company believes that further fossil fuel exploration is unnecessary for the global transition towards sustainable energy, highlighting this as the opportune moment to revise its stance on fossil fuels.

The insurer’s new policy is a component of a larger climate-transition framework that Zurich plans to unveil later this year. This strategy will impose stringent requirements on the company’s top carbon-emitting corporate clients, demanding concrete actions towards reducing their carbon footprints. Despite the lucrative revenue from fossil-fuel infrastructure insurance, which totaled about $2.1 billion last year, Zurich anticipates that its new policy will not adversely affect its financial performance. The firm is prepared to continue its support for existing fossil fuel projects while refraining from engaging in new ventures.

Zurich’s proactive approach to climate change, including its withdrawal from the Net Zero Insurance Alliance due to concerns over potential political and legal challenges, reflects a broader industry struggle with environmental sustainability. However, Zurich’s CEO, Mario Greco, emphasizes the importance of companies adhering to their convictions and engaging directly with clients on sustainability, rather than relying on alliances to foster change. This change in policy follows criticism Zurich faced over its support for new oil and gas extraction projects and has been praised by environmental groups. The move positions Zurich as a leader in promoting cleaner energy solutions, such as carbon capture and hydrogen power, and highlights the pivotal role insurers play in driving the global transition towards renewable energy.

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