- Insure Our Future, a global coalition of organizations that advocates for insurers to strengthen their efforts against the climate crisis and of which the International Institute for Law and Environment (IIDMA) is a member, has published its eighth annual report.
- Mapfre, Spain’s leading insurer, continues to face challenges in implementing stricter policies to fully eliminate its exposure to new fossil fuel projects.
Madrid, December 12, 2024 – The eighth annual Insure Our Future report, titled “Within Our Power”, reveals that insurers have incurred global losses of approximately $600 billion over the past two decades due to climate change-induced weather events. These substantial climate-related losses have been systematically passed on to policyholders by insurers.
According to the report, which also evaluates the fossil fuel policies of the world’s top thirty insurers, Mapfre ranks twelfth globally in terms of fossil fuel insurance restrictions and ninth in divestment. The company has taken significant steps by pledging not to invest in companies that plan to develop more than 300 MW of coal-based installed capacity, or in those that generate 20% or more of their revenue from thermal coal extraction or produce more than 20 million tons annually. While these measures aim to mitigate substantial CO₂ emissions and their severe environmental impacts, their policies still face significant challenges.
For instance, Mapfre has not made a clear commitment to avoid acquiring new bonds from companies involved in coal mine expansion or related infrastructure. Although the insurer has established certain coal-related thresholds and commits not to invest in companies exceeding these limits, it could still acquire bonds from companies developing new coal mines that remain below these thresholds, thereby contributing to fossil fuel expansion.
Furthermore, while Mapfre claims to refrain from investing in or insuring oil and gas companies without a robust transition plan, the methodology for defining these plans lacks specific criteria, leaving room for investments in expansion projects within these sectors.
Regarding coal project insurance, Mapfre commits to not insuring “the construction of new coal-fired power plants or the operation of new mines.” It also “will not insure construction and assembly projects for new infrastructure exclusively serving the construction and/or operation of thermal coal mines or coal-fired power plants.” However, the company considers exceptions that will be evaluated through their internal ESG (Environmental, Social, and Governance) analysis systems, taking into account factors such as the country’s development level according to UN classification, its coal dependency, and the availability of renewable or low-carbon alternatives.
Consequently, Mapfre could continue to insure and invest in certain coal and/or oil and gas companies that plan to develop new coal projects and/or hydrocarbon exploration and production ventures, despite claiming not to invest in fossil fuel companies without an “energy transition plan that enables maintaining global warming around 1.5ºC,” as stated in their environmental commitments for investment and underwriting.
Despite these challenges, the company stands out as one of the most progressive insurers in Spain, although adopting stricter policies could strengthen its position in climate transition.
The Global Context: Insurers’ Critical Role in the Climate Crisis
The report emphasizes that fossil fuel expansion remains economically unsustainable, as climate-related losses attributable to insurers ($10.6 billion) nearly matched premiums obtained from this sector ($11.3 billion) in 2023.
The analysis also reveals that seven European insurers, including Allianz, AXA, Aviva, and Zurich, have recorded losses of $3.23 billion, substantially exceeding revenues from coal, oil, and gas insurance premiums, which amounted to $2.2 billion.
On average, insurers derive very little revenue—less than 2% of total premiums—directly from the fossil fuel sector, indicating no significant economic dependence on this sector. This situation demonstrates that insurers have an opportunity to leverage their independence and impose stricter conditions on the sector while protecting the remaining 98% of their business from escalating climate change risks, largely generated by the fossil fuel industry.
Generali, an Italian insurer, has emerged as a leader by establishing restriction policies encompassing the entire oil and gas value chain, surpassing Allianz in this year’s Scorecard.
2024 Impacts: Floods, Storms, and the Human Cost of Climate Change
Insure Our Future’s analysis indicates that the industry as a whole has stagnated in effective climate action, neglecting local populations worldwide by exposing them to increasing risks without protection and forcing them to bear exorbitant costs for problems in which they had little or no responsibility.
In 2024, climate disasters have left a devastating mark. Storm Henk in the UK, with rainfall four times more intense than normal due to climate change, generated insured losses of $190 million. In Spain, catastrophic floods in Valencia, with unprecedented intensity due to global warming, resulted in hundreds of deaths, underscoring the urgency of strengthening climate resilience.
“In Spain, we are experiencing the devastating impacts of intensified droughts and floods, as evidenced by the floods caused by the DANA’s passage through Valencia last October, which claimed lives and severely impacted communities that will take time to recover,” states Ana Barreira, Director of IIDMA. “Nevertheless, insurers continue to favor fossil fuel premiums that, despite representing only 2% of their portfolios, have ramifications that extend far beyond their balance sheets,” she concluded.
