Major Insurers Zurich and Munich Re Withdraw from Net-Zero Insurance Alliance.

In
a blow to the efforts to mitigate climate change, two of the founding members
of the Net-Zero Insurance Alliance (NZIA), Zurich and Munich Re, have announced
their withdrawal from the group.

The
NZIA comprises 30 insurance and reinsurance firms, which account for roughly
15% of the worldwide premium volume, representing a significant portion of the
industry.

Their
main objective is to attain net-zero greenhouse gas emissions by 2050 by
transitioning their underwriting portfolios.

Zurich,
a multinational insurance company, has announced its decision to withdraw its
investments from activities that do not support the transition to a low-carbon
economy. The company stated that it aims to prioritize its resources in
assisting its customers with their shift towards sustainable practices. Zurich
has also implemented a uniform approach for measuring and disclosing the
greenhouse gas emissions related to its underwriting portfolios for insurance
and reinsurance.

While
Zurich remains fully committed to its sustainability ambitions, the company has
decided to concentrate on serving its clients’ sustainability needs.

Munich Re, one of the world’s largest reinsurance companies, made a similar announcement just days before Zurich’s announcement. The firm stated that its membership in the NZIA was no longer necessary as it had already achieved its climate targets.

The departure of Zurich and Munich Re from the NZIA is a significant setback for the global insurance industry’s efforts to combat climate change.

In
July 2021, eight leading re/insurance companies unveiled the Net-Zero Insurance
Alliance (NZIA) at the G20 Climate Summit in Venice. This initiative was
applauded as a significant step forward for the insurance sector in the pursuit
of achieving net-zero greenhouse gas emissions.

The
NZIA has since grown to include 30 companies, including Allianz, AXA, and Swiss
Re. The NZIA’s withdrawal from two of the founding members raises questions about the alliance’s effectiveness in achieving its goals. It is not yet clear if other members of the alliance will follow Zurich and Munich Re’s footsteps or if the companies will collaborate with the alliance in some other way. Nonetheless, the departure of the two companies is a reminder that the global effort to address climate change requires consistent, long-term commitments from all sectors of the economy.