The US insurance sector held US$536 billion in fossil fuel-related assets in 2019, according to new research, despite climate-related risks and natural disasters prompting insurers to raise premiums and drop coverage within high-risk regions. ‘Changing Climate for the Insurance Sector’, published by Ceres, ERM and Persefoni, analysed the 2019 assets of insurers compiled by the California Department of Insurance (CDI), noting that the US insurance sector is “uniquely exposed” to climate-related challenges. Seventy-seven percent of all insurers operating in the US report to the CDI database; the top 16 firms accounted for roughly half of the sector’s exposure. The top US property and casualty firms, Berkshire Hathaway and State Farm Insurance, owned 44% of total fossil fuel-related assets owned by the entire sector, the report said. Asset ownership across life insurance companies were “more broadly distributed”, with TIAA Family Group and New York Life owning 14% of fossil fuel-related assets owned by organisations in that sector. Earlier this year, US insurers such as State Farm and Farmers Insurance announced that they will stop offering new or renewing policies in California, due to increased wildfire risk. Mindy Lubber, CEO and President of Ceres, said: “Insurance companies are facing increasing climate change risks as the frequency and severity of extreme weather events, such as hurricanes, floods, and wildfires, escalate. This report reveals the urgent need for insurers to address the financial risks of climate change posed by their fossil fuel holdings and take advantage of opportunities to accelerate the transition of their investment portfolios to a clean energy future.”
New research from Ceres, @SustInsti, and @Persefoni shows that U.S. insurers have significant exposure to fossil fuel assets, despite citing climate risk and natural disasters as factors in raising premiums and dropping coverage. Learn more: https://t.co/LaGIoTr0mY
— Ceres (@CeresNews) August 8, 2023
