NEW RESEARCH SHOWS INSURANCE SECTOR HAS SIGNIFICANT EXPOSURE TO FOSSIL FUEL ASSETS DESPITE VULNERABILITY TO CLIMATE CHANGE
LONDON and WASHINGTON, Aug. 8, 2023 /PRNewswire/ -- A new report finds that the U.S. insurance sector held $536 billion in fossil-fuel related assets in 2019, despite some insurers citing climate-related risk and natural disasters as factors in raising premiums and/or dropping coverage within certain high-risk regions.
The report, Changing Climate for the Insurance Sector, conducted by Ceres, ERM, and Persefoni, reveals that the top 16 U.S. insurers alone held more than 50 percent of the half trillion dollars in fossil fuel-related assets owned by the sector. The quantitative analysis was undertaken using U.S. Insurers' 2019 assets compiled by the California Department of Insurance, the most complete and recent dataset currently available.
Some insurers are currently moving to curtail climate-related risk, with a growing number ceasing to offer certain policies in some locations. This includes State Farm's May 2023 decision to stop offering new home insurance policies in California due to wildfire risk, Farmers' July 2023 announcement that they will stop renewing almost a third of the policies the company has written in Florida, and close to 20 home insurers in hurricane-prone Louisiana either pulling out of the state or declaring insolvency.
The report also revealed that the top two U.S. property and casualty companies, Berkshire Hathaway and State Farm Insurance, owned 44 percent of total fossil fuel-related assets owned by the entire sector. Asset ownership among life insurance companies was more broadly distributed, with the top two life insurance companies, TIAA Family Group and New York Life, owning 14 percent of assets owned by companies in that sector.
Methodology
This research is based on quantitative analysis of U.S. insurance sector investments in fossil fuel and green bonds and the ways that insurers' approaches to fossil fuel exposure in investments and underwriting has evolved over the past five years. It was undertaken using data captured in a California Department of Insurance (CDI) database of US insurance companies operating in California, which covers the most recent years of data available (2018/19) and was released in 2022. As insurers reporting to the CDI database comprise 77% of all insurers operating in the US, the dataset is broadly representative of the overall US insurance sector. Please refer to the full report for further methodology detail.
Media Contact: Diane May, [email protected]
SOURCE Ceres
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