Lloyd’s of London has announced its resignation from the Net Zero Insurance Alliance (NZIA), becoming the tenth major player to do so. The decision, effective immediately, reflects the growing concerns and pressures faced by the insurance industry.
Lloyd’s emphasized its commitment to sustainability by pledging continued support for the United Nations’ Principles for Sustainable Insurance and the Sustainable Development Goals.
The company intends to pursue its sustainability strategy while actively contributing to the global economy’s transition.
John Neal, Chief Executive of Lloyd’s, highlighted the need for the global climate alliance to reconsider its membership rules. He urged the NZIA to adopt a less prescriptive approach to prevent further departures and avoid potential disintegration.
Political pressure from certain U.S. states has compelled companies to exit the alliance, making Lloyd’s decision less surprising.
Joining the ranks of QBE and Sompo Holdings, Lloyd’s follows in the footsteps of major insurance firms such as AXA and Allianz in marking its departure from the NZIA.
Some governments in Europe have privately voiced concerns that insurers in the NZIA could cause the cost of energy to rise if they collectively stopped underwriting fossil fuels, revealed a source close to the leadership team at Gfanz.
AXA France also said on Thursday, Axa said that is would its “sustainability journey, as an insurer, an investor and a responsible company”. Allianz also remarked that it remained “fully committed”.
Meanwhile, reinsurer Scor’s departure was announced on Thursday with a new set of “climate pledges”. The Japanese insurer Sompo, also revealed it would continue to pursue its climate goals “vigorously” while outside the group.
And, Lloyd’s stated that it remained “committed to delivering our sustainability strategy, including supporting the global economy’s transition”.
The UN-convened Net-Zero Insurance Alliance is a group of some of the world’s leading insurers and reinsurers representing a significant percentage of world premium volume globally.
NZIA members have committed to transition their insurance and reinsurance underwriting portfolios to net-zero greenhouse gas (GHG) emissions by 2050, consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100, in order to contribute to the implementation of the Paris Agreement on Climate Change.
As risk managers, insurers and investors, the insurance industry has an important role in the transition to a net-zero global economy.
The NZIA is a member-led group that supports its members as they work towards decarbonising their underwriting portfolios by individually setting science-based intermediate targets and reporting on their progress annually. The Alliance will also advocate for and engage in governmental policies for a science-based and socially just transition of economic sectors to net-zero.
by Yana Keller
