“Political attacks” are hampering insurers’ efforts to price climate risks, the Glasgow Financial Alliance for Net Zero said on Friday, after a wave of insurers quit a group in the industrial climate after pressure in the United States.
“These political attacks are now disrupting insurers’ independent efforts to price climate risk, harming policyholders, high street investors and local economies,” a spokesperson said. of GFANZ, a coalition backed by the United Nations of financial institutions launched by ex-Bank of England Governor Mark Carney, said in a statement.
Allianz, AXA and SCOR, three of Europe’s largest insurance companies, on Thursday became the latest insurers to quit the Net-Zero Insurance Alliance following accusations by some US Republican Attorneys General that they violated antitrust laws.
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Japan’s SOMPO Holdings, a major Asian insurer, was no longer listed as a member on the NZIA website on Friday. It is the first insurer outside of Europe to leave the alliance. A SOMPO spokesperson did not immediately respond to a request for comment.
The exodus of some of the world’s biggest insurers has raised questions about the viability of the NZIA, which was set up in 2021. Lloyd’s of London CEO John Neal told Reuters this week that the alliance needed to make membership rules that were not too prescriptive, or it risks falling apart.
NZIA members held several calls this week on alliance options, sources said.
Some Republican politicians have launched a campaign against financial institutions that work together to try and curb carbon emissions, part of a broader push against businesses that use environmental factors, social and management in their decision making.
Vanguard, one of the world’s largest asset managers, in December left another alliance for fund managers, citing the need for independence, although other GFANZ groups largely resisted the pressure.
According to the NZIA website, it now has 23 members including Aviva, Lloyd’s of London and Tokio Marine Holdings.
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Legal experts say it is difficult to make a legal case against insurers for violating antitrust laws, and the NZIA seeks legal advice when setting requirements for members. But insurers are worried about a showdown with Republicans that has ramped up a high-profile campaign.
Consumers’ Research, an activist group highly critical of ESG policies, said on Thursday it would use a mobile billboard outside the US offices of NZIA members to force them to quit.
Most of those who left NZIA have large businesses in the US, but so do some of those still in the group. Some of the insurers who quit also remain part of other GFANZ alliances.
“Despite these political problems, we will continue to support insurers’ efforts to manage climate risk and develop transition plans,” a GFANZ spokesperson said in the statement.
GFANZ, co-Chaired by Carney, was launched in 2021 before the UN climate summit, COP26, in Glasgow.
(Reporting by Tommy Reggiori Wilkes; editing by Simon Jessop and Conor Humphries)
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