Swiss Re steps up exit from fossil fuel sector

Swiss Re is the latest international insurance and reinsurance group to step up its commitment to stop insuring and investing in fossil fuels, as it announced an enhanced oil and gas policy.

The Swiss group said the policy now excludes insurance and investment in all new oil and gas field projects with a final investment decision approved after 2022. The policy does allow exceptions for oil and gas companies with credible net-zero plans.

The group also commits to reducing its support for oil and gas companies in the upstream, midstream and downstream sector, such as utilities and refineries.

The reinsurer has said that by 2025 it will derive half of its oil and gas sector premiums from companies credibly aligned with net-zero goals, and that by 2030 it will only do business with credibly net-zero-aligned companies in the sector.

The group said it will also start work on its approach to exclude oil and gas from treaty reinsurance business, and will communicate details of this next year.

The Swiss Re commitments follow news from Spain’s Mapfre and Germany’s Hannover Re that they will also step up efforts to pull out of underwriting and investing in the fossil fuel sector.

Pressure group Insure Our Future welcomed Swiss Re as the first major insurer to adopt a policy that excludes cover for most new oil and gas projects.

Peter Bosshard, global coordinator of Insure Our Future, said: “Swiss Re is one of the world’s ultimate risk managers and the policy that it published today sends a strong message to fossil fuel companies, investors and governments – oil and gas operations need to be phased out in accordance with climate science or they may become uninsurable by the end of the decade. Now, the Insure Our Future campaign calls on Munich Re, Lloyd’s and Scor, which together account for 26% of the global reinsurance market, to make commitments that build on Swiss Re’s approach by the time of their annual general meetings.”

Lucie Pinson, director of Reclaim Finance, added: “By taking steps to stop insuring new oil and gas projects and companies that won’t aim at aligning their activities with climate science by 2030, Swiss Re is headed in the right direction. The policy is not perfect yet and we encourage its peers to build on it to fully align with a realistic 1.5°C scenario. As the IEA Net Zero Roadmap shows, this should mean drawing a red line against fossil fuel expansion and excluding both projects and companies that cross that line well before 2025.”