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(Bloomberg) — Top insurance companies suffered $10.6 billion of climate-attributed losses this year, just shy of the $11.3 billion of direct premiums they underwrote for commercial fossil-fuel clients in 2023, according to Insure Our Future.
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Of the 28 insurers reviewed, more than half were hit by climate-attributed losses that exceeded the coal, oil and gas premiums they earned, Insure Our Future said Tuesday in a statement. On average, fossil-fuel premiums account for less than 2% of total premiums, raising questions about why insurers aren’t using their immense influence to protect the other 98% of their business from spiraling climate risks.
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The report said climate change accounted for about $600 billion, or more than 33%, of global insured weather losses over the past two decades. Climate-attributed losses rose to an average 38% of total insured weather losses over the past decade, up from 31%.
The insurance industry has itself warned about the rising toll. Insured losses from natural catastrophes are on track to exceed $135 billion in 2024, Swiss Re said in a recent statement. It marks the fifth consecutive year that insured losses from natural disasters will break the $100 billion mark.
Insure our Future said the climate price tag should persuade the sector to stop underwriting fossil-fuel expansion and align their businesses with 1.5C transition pathways.
“Insurers are walking away from communities to protect shareholder returns from losses, sparking the crisis of insurance affordability and access,” the report said.
As recently as last year, insurance market for renewable energy was less than 30% the size of the fossil-fuel market, threatening to be a “bottleneck” for investing in clean energy, the report said. It identified Axis Capital, Aviva Plc and Munich Re as the only major insurers that write more direct premiums for renewable energy than fossil fuels.
(Adds information about renewables insurance market in last paragraph.)
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