Eight of the world’s biggest insurance and reinsurance companies formed an alliance to aid in accelerating the shift to a net-zero emissions economy.
The aim of the Net-Zero Insurance Alliance (NZIA) is to transition insurance and reinsurance underwriting portfolios towards net-zero greenhouse gas emissions by the year 2050. The aims of the alliance are consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100.
The founders of the NZIA are AXA (Chair), Allianz, Aviva, Generali, Munich Re, SCOR, Swiss Re, and Zurich. All three of Europe’s top three insurers by premium, Allianz, AXA and Generali, are founders of the alliance.
Pressure on insurers to disclose their decarbonisation plans is increasing. Insurers are also being pushed to stop underwriting and investing in fossil fuel projects. This alliance hopes to accommodate for some of these pressures by taking a step in the direction of climate-positive insurance practices
Each company has set individual, science-based, intermediate targets on a 5-year basis. Companies will report on their progress annually in cooperation with competition authorities. Thomas Buberl, Chief Executive of the AXA Group suggests that this alliance is an effort to further raise climate ambitions. The alliance considers the latest available scientific knowledge and associated social impacts.
NZIA members will create underwriting criteria for the activities in their underwriting portfolios that are the most carbon-intensive. They will also be expected to design solutions for zero-emission and low-emission technologies. Companies in the alliance will also be required to include decarbonisation and net-zero criteria in their risk management frameworks.
This alliance has pledged to join the Glasgow Financial Alliance for Net Zero (GFANZ), which is chaired by U.N. climate envoy Mark Carney. GFANZ represents over $88 trillion in assets and unites net-zero financial alliances within the UN’s Race to Zero campaign. Carney suggests that this alliance will make underwriting companies dependent on these companies having credible net-zero transition strategies.
