(Reuters) – Allianz SE, Europe’s largest insurance company, plans to take a tougher line when it comes to insuring the oil and gas industry as part of its efforts to align its insurance policy with the world’s climate goals, the company said on Friday.
The move is the latest by a major insurer to limit insurance to the energy sector, a leading driver of greenhouse gas emissions, and comes when researchers warn of a rapidly closing window to limit the worst effects of global warming.
It follows a report from the International Energy Agency last year which said that no more investments are needed in new oil and gas fields if the goal were to be achieved.
With increasing pressure to accelerate companies̵7; efforts to limit emissions, Allianz said from the beginning of 2023 that they would no longer issue new property and accident insurance to finance new oil and gas projects, and stop renewing existing contracts from July 2023. .
The new exemptions would include exploration and development of new oil and gas fields; construction of new oil infrastructure in the center; construction of new oil power plants; and those linked to projects in the Arctic, Antarctic or methane in coal beds, extra heavy oil and oil sands, as well as ultra-deep sea fields.
“With these new guidelines, Allianz strengthens its promise to contribute to an orderly carbonization of the economy,” said Allianz board member Günther Thallinger.
From January 2025, Allianz said it would only insure oil and gas companies that were on a science-based path to net zero emissions by 2050, including the major oil companies responsible for most of the emissions.
From the same time, Allianz also said that it would not provide any insurance, optional reinsurance or reinsurance for a single risk or a defined risk package, or financing to companies that receive more than 10% of their revenues from oil sands, having previously determined threshold of 20%.
The NGO Insure our Future said it welcomed the Alliance’s move, which “raises the bar for the insurance industry” and called on others in the industry to follow suit.
Allianz is the tenth major insurance company to adopt oil and gas restrictions, it said, and it was “real momentum now for all insurance companies to adopt oil and gas policies that are in line with climate science.”
Among others who have tightened their policies in recent months is Swiss Re, the world’s second largest reinsurance company, which in March said it would no longer insure most new oil and gas projects.