At a Glance:
- Allianz has planned to take a harder line in insuring the oil and gas industry.
- Allianz made it official that with the start of 2023, it will no longer issue new property and casualty insurance to fund new oil and gas projects.
- From January 2025, Allianz will only insure oil and gas companies that are on a science-based pathway with net-zero emissions by 2050.
Allianz is among the biggest insurer in Europe. It has planned to take a harder line in insuring the oil and gas industry. This is to align the underwriting policies with the world’s climate goal.
It is among the recent move by a major insurer to curtail insurance to the energy sector—which is a leading contributor of greenhouse gases— given the continuous warnings by the scientists on closing the window for the worst effects of global warming.
This decision followed a report from the International Energy Agency in 2021 that stated no further investment was needed for the new oil and gas fields if the world’s climate goal target is to be met.
Strengthening the promise of decarbonization
Amidst the rising pressure of surging corporate efforts to rein in emissions, Allianz made it official that with the start of 2023, it will no longer issue new property and casualty insurance to fund new oil and gas projects and stop reviewing existing contracts from July 2023.
These new exclusions outline that it would cover exploration and development of new oil and gas fields, construction of new oil power plants, construction of new mid-stream oil infrastructure, and the projects in the Arctic, Antarctic or coal-bed methane, extra-heavy oil, and oil sands, as well as ultra-deep sea fields.
Günther Thallinger, the board member commented, “With these new guidelines, Allianz is strengthening its promise to contribute to an orderly decarbonization of the economy.”
Allianz new initiative
From January 2025, Allianz will only insure oil and gas companies that are on a science-based pathway with net-zero emissions by 2050. This also includes big oil companies that are responsible for the lion’s share of emissions.
Furthermore, the company also shared that it will provide no insurance, reinsurance, or facultative reinsurance for a single risk or defined package of risks, or fund to companies that accumulate more than 10% of the revenue from oil sands—which was previously 20%.
