Risk is unavoidable: you cannot run a business without it. Insurance transfers and spreads risk, protecting people and institutions. It is an indispensable part of the economy.

However, much of the activity underwritten (insured) by insurance companies today has incredibly harmful impacts. In the face of climate catastrophe, insurance companies continue to underwrite new fossil fuel extractionⁱ. Disregarding species loss, insurers underwrite agricultural and extractive activities which cause deforestation and destroy habitatsⁱⁱ. These projects, and others like them, are often associated with human and labour rights violations and negative impacts on public healthⁱⁱⁱ. 

Many of these damaging projects could not take place without insurance, either due to high risks^iv, regulatory requirements^v, or both.  

Insurance companies are also investors as well as underwriters. They invest the payments (premiums) they collect from individuals and businesses. These investments can be in industries with negative social or environmental impacts. The sector’s investment power is significant: insurance companies are among the wealthiest institutions on Earth^vi. 

In 2023, estimated insurance losses due to natural catastrophes reached an estimated $118 billion, far in excess of previous projections^vii.  Yet the insurance industry’s warped incentives stop it addressing the underlying causes of these issues. Instead, it profits in the short-term from activity, such as fossil fuel extraction, that will ultimately raise its costs and eventually undermine its ability to exist. This has to stop.  

Half of insurers were ranked as a grade E or F, indicating their policies fail to meet fundamental environmental and social standards.

Half of the 65 insurance companies were ranked as a grade E or F in our assessment, based on 74 indicators of their approach to climate change, biodiversity and social issues. This indicates extremely poor performance across both investment and underwriting. The highest grade achieved was a B, which only seven insurers received.

Insurers were ranked in three categories based on their insurance type: property and casualty; life and health; Lloyd’s of London managing agents. Lloyds of London is different to most insurance companies. It operates as a marketplace within which insurers, called managing agents, offer insurance cover. Many managing agents are subsidiaries of other large insurance companies.

Just two institutions received more than half the available points in the survey: AXA Group (52%) in the property and casualty ranking; and CNP Assurances SA (51%) in the life and health ranking. Performance at Lloyd’s of London is particularly poor, with almost half the managing agents we ranked achieving an F grade. 

Although they still have much to improve on, European insurers perform best as a group. The gap between Asia and Europe has narrowed since our last report in 2021, but US insurers continue to have much weaker policies. 

To help tackle the climate crisis, insurers must set meaningful net-zero emissions commitments and have a credible plan to achieve them. While most have now set some kind of long-term net-zero target, fewer than 25% of insurers have adequate interim targets for 2030 or robust transition plans covering either investment or underwriting.

Insurers’ policies still allow for coal, unconventional oil & gas, and new conventional oil & gas projects to be underwritten or invested in, jeopardising chances of meeting the Paris Agreement target of limiting the global temperature rise to 1.5 degrees Celsius (1.5C)^viii. Those restrictions which are in place are rife with exceptions, allowing investment and underwriting to reach fossil fuel companies ‘through the side door’. The majority of insurers have failed to rule out underwriting the some of the world’s most controversial fossil fuel projects.

Biodiversity loss has been identified as one of the biggest risks to the economy^xii, and at least one million species are at risk of extinction^{xiii, xiv}. Yet biodiversity scores were the worst among all the issues we assessed, for both investment and underwriting.

43% of insurers – including all North American insurers – received zero marks for biodiversity underwriting. The picture is similar for investment, where only one US insurer (MetLife Inc) scored more than 3%.

Most insurers are not considering biodiversity in policies for key sectors and are not considering areas of global biodiversity importance.

Aside from controversial weapons, the insurers we assessed largely neglected human rights, labour rights, and public health considerations . Almost two-thirds of insurers have some kind of investment restriction on controversial weapons, as do 40% for underwriting; these are often mandated by law^xv. Far fewer insurers restrict investment or underwriting on the basis of human rights violations, tobacco production, or other social issues.

Indigenous peoples' and local community rights are almost entirely overlooked by insurers: less than 20% of firms have any kind of investment policy or reported engaging with investee companies on this issue..

Investors reported engaging with clients on social topics much less frequently than on climate-related issues. Very few insurers reported using social metrics to assess investee companies, and none reported engaging with underwriting clients on human or labour rights impacts. 

Selection of insurers:

• This report assesses the performance of 65 of the world’s largest (re)insurers.
• The largest insurers were selected from each of the three categories of insurer we assessed: property and casualty (P&C); life and health (L&H); and Lloyd’s of London managing agents (MA).
• Insurance brokers and pensions business were excluded.
• Insurers were categorised based upon the revenue from relevant business lines.
• An insurer with >5% of revenue from P&C was categorised as a property and casualty insurer. Insurers with a relevant P&C business may also have a life and health business. Given our focus on underwriting relating to large-scale business infrastructure, we did not consider home or auto business to be relevant, and if this was the only non-Life and Health business of the insurer, we included them in the L&H ranking.
• Lloyd’s of London is included in the survey in two places. It is included in the property and casualty ranking to evaluate the marketplace’s general policies, whilst 13 of its largest managing agents are benchmarked in a separate ranking.

Scope of assessment:

• Insurers were scored against questions covering climate change, biodiversity, social issues, and governance and engagement.
• The surveys were specific to the business of different insurers, and are available below.

Download survey for Property and Casualty insurers here.

Download survey for Life and Health insurers here.

Download survey for Lloyd’s of London Managing Agents here.

Depending on the categorisation of insurer, either investments or underwriting or both were assessed across the themes (climate change, biodiversity, social issues, and governance and engagement) as follows:

• The investment policies and practices of 23 of the world’s largest life and health insurers.
• The underwriting approach of 13 of Lloyd’s of London’s largest managing agents.
• Both investment and underwriting among 29 of the world’s largest insurers with a relevant property and casualty business.

Assessment across types of insurers:

• The survey was first populated from public sources and then verified and amended by insurers directly.
• Grades (A through to F) were awarded based upon the number of ‘key standards’ of responsible business practice the insurer met, across the themes assessed.
• The key standards met by each insurer are available here: Key Standards Summary
• Since each category of insurers was asked a different set of questions, the requirements for each grade vary by category, and overall scores are not directly comparable from one category to another.
• The overall percentage score in the ranking table represents the aggregate of individual question scores across the survey. This determines the position of insurers within each grade.

Full details of our methodology are available in the report.

We thank all members of our expert review panel for their feedback on the survey design and the report:

Ariel Le Bourdonnec – Insurance Campaigner, Reclaim Finance

Ben Howarth – Chief Sustainability Officer, Association of British Insurers

Catherine Bryan – Trustee, Synchronicity Earth

Dominik Rothmund – Advisor, Sustainable Finance, WWF Switzerland

Felicia Liu – Lecturer, York University (UK)

Financial System Benchmark team, World Benchmarking Alliance

Jacqueline Duiker – Senior Manager, VBDO

Jenna Coull – Principal Economist, RSPB

Jill Atkins – Professor, Cardiff University (UK)

Kevin Chuah – Assistant Professor, Northeastern University (US)

Kim Dunn – Senior Policy Officer, RSPB

Lindsay Keenan – Insure Our Future: European Coordinator, The Sunrise Project

Rebecca Deegan – Chief Sustainability Officer, Association of British Insurers

Regine Richter – Public Bank Campaigns, Urgewald

Regula Hess – Senior Advisor for Sustainable Finance, WWF Switzerland

Sara Heinsbroek – Project Manager Sustainability & Responsible Investment, VBDO

i. Insure Our Future (2023) Fifty Years of Climate Failure: 2023 Scorecard on Insurance, Fossil Fuels and the Climate Emergency Available at: https://global.insure-our-future.com/wp-content/uploads/sites/2/2023/11/IOF-2023Scorecard.pdf.

ii. Faber S, Rundquist S, Male T (2012) Plowed Under: How Crop Subsidies Contribute to Massive Habitat Losses, Environmental Working Group; Defenders of Wildlife Available at: https://static.ewg.org/pdf/plowed_under.pdf.

iii. Gomez K, Regaignon GT (2015) Digging deeper: the impact of coal on human rights. OpenGlobalRights. Available at: https://www.openglobalrights.org/digging-deeper-impact-of-coal-on-human-rights/ [Accessed February 5, 2024].

iv. Hufeld F, Koijen RSJ, Thimann C eds (2018) The Economics, Regulation, and Systemic Risk of Insurance Markets, First published in paperback, Oxford University Press, Oxford, United Kingdom.

v. Bureau of Ocean Energy Management (BOEM) (2023) BOEM Proposes Stronger Financial Assurance Requirements for Offshore Oil and Gas Industry to Protect Taxpayers from Being Forced to Pay Decommissioning Costs. Available at: https://www.boem.gov/newsroom/press-releases/boem-proposes-stronger-financial-assurance-requirements-offshore-oil-and [Accessed February 4, 2024].

vi. Jiménez JH (2022) Insurance accounts for more than 7% of the global economy. MAPFRE. Available at: https://www.mapfre.com/en/insights/insurance/insurance-accounts-for-more-than-seven-percent-the-global-economy/

vii. Rathore V, Giri PC (2023) Catastrophe Risk Appetite Varies Among Global Reinsurers, CRISIL Global Analytical Center, an S&P affiliate, Mumbai Available at: https://www.spglobal.com/ratings/en/research/articles/230824catastrophe-risk-appetite-varies-among-global-reinsurers-12830280 [Accessed February 5, 2024]

viii. Net Zero by 2050 – Analysis IEA. Available at: https://www.iea.org/reports/net-zero-by-2050 [Accessed January 15, 2024].

ix. BankTrack (2022) Adani Group (financed by JP Morgan, MUFG, HSBC, BlackRock) is running an enormous fossil fuel project in Australia, violating Indigenous Rights. Available at: https://www.banktrack.org/article/jp_morgan_is_financing_a_devastating_fossil_fuel_project_in_australia_violating_indigenous_rights [Accessed March 4, 2024].

x. Carrington D, editor DCE (2022) ‘Monstrous’ east African oil project will emit vast amounts of carbon, data shows. The Guardian. Available at: https://www.theguardian.com/environment/2022/oct/27/east-african-crude-oil-pipeline-carbon[Accessed January 30, 2024].

xi. Policy Note (2023) Counting the Costs and Contradictions of the Trans Mountain Pipeline Expansion. Available at: https://www.policynote.ca/tmx-costs/[Accessed March 4, 2024].

xii. World Economic Forum (2024) Global Risks Report 2024, WEF, Geneva Available at: https://www.weforum.org/publications/global-risks-report-2024/ [Accessed February 21, 2024].

xiii. Daigle K, Janicki J, Daigle K (2022) Extinction crisis puts 1 million species on the brink. Reuters. Available at: https://www.reuters.com/lifestyle/science/extinction-crisis-puts-1-million-species-brink-2022-12-23/[Accessed February 21, 2024].

xiv. Hochkirch A, Bilz M, Ferreira CC, Danielczak A, Allen D, Nieto A, Rondinini C, Harding K, et al (2023) A multi-taxon analysis of European Red Lists reveals major threats to biodiversity. PLoS ONE 18, e0293083.

xv. Insights ISS (2022) Italy Strengthens Prohibition on the Financing of Controversial Weapons. ISS Insights. Available at: https://insights.issgovernance.com/posts/italy-strengthens-prohibition-on-the-financing-of-controversialweapons/ [Accessed February 20, 2024].