Sustainability and Insurance: October Roundup
October 20, 2025
Welcome to our quarterly roundup, keeping you up to date on the insurance industry’s most significant sustainability-related news. Today’s topic: Retreat or reinvention? Climate ambition after break-down of the alliances.
Read our summary and analysis below.
Analysis
Retreat or reinvention? Climate ambition after break-down of the alliances
When we imagined 2025, it didn’t look like this.
Key environmental commitments signalled 2025 as a critical year for environmental targets and a watershed moment to mark progress through the decade. For example, back in 2021 the Net Zero Asset Owners Alliance committed to reducing portfolio emissions by 25-30% by 2025.
As previously reported, we are seeing the watering down of environmental commitments and sustainability moving down companies’ strategic agendas. There are headwinds facing the transition, including in London, with Lloyd’s scrapping its commitment to end coverage for the most polluting fossil fuels.
We are seeing competing narratives about the future of climate ambition in insurance – but are we at the end of the road or do significant opportunities remain?
(Re)insurers have visibly dialled back their commitment to sustainability alliances, despite playing a leading role in the past in setting ambitious targets and building coalitions to drive progress. One of the most high-profile departures was Munich Re announcing its withdrawal from several climate-focused industry coalitions, stating that climate-related disclosures and the administration required are disproportionate to the climate protection impact they achieve. Previously, Munich Re were one of the first to withdraw from the Net Zero Insurance Alliance (NZIA) back in 2023, citing antitrust risk and the increasing complexity of requirements.
This comes after a wider series of departures, especially from North America. For example, after the exit of BlackRock, the Net Zero Asset Managers Initiative (NZAM) announced the suspension of its primary activities in a changing political and regulatory environment. All major US and Canadian banks have exited the Net Zero Banking Alliance (NZBA), the members of which recently voted to cease operations and change the organisation from a membership-based alliance to ‘establishing its guidance as a framework.’
Among all the acronyms and alliances, the key question is whether (re)insurers (and financial institutions more broadly) are abandoning their climate targets or merely looking away from alliances as the way to achieve sustainability goals. In the case of Munich Re, the ambition to reduce emissions from insurance and investments to net zero by 2050 seems to remain intact. They reported achieving interim 2025 climate targets such as reducing GHG emissions related to their investment portfolio by 29% by 2025, compared to a 2019 baseline.
If this is the case, perhaps we are framing the question in the wrong way. Rather than judging (re)insurers against the ‘stick’ of abandoned targets or faltering alliances, we could focus instead on the ‘carrot’ of opportunity, asking if there are still opportunities here for insurance players.
In our view, the opportunity for potential premiums remains significant. The Swiss Re Institute estimated that renewable energy investments could generate additional premiums from the energy sector of $237 billion by 2035 if countries deliver on their renewable energy targets. Critically, the estimate finds that potential premiums are substantial even if progress is more sluggish.
In the world of carbon credits, analysis from Allied Offsets suggests that demand from the aviation industry may outstrip supply to meet CORSIA Phase 1 requirements. If the push for high-quality carbon credits to meet regulatory requirements continues, this might breathe new life into carbon credit insurance.
It is worth noting that not all (re)insurers are backing out of their climate commitments. Aviva, for example, have reiterated adherence to their climate transition plans. Earlier this year, Aviva published a new net zero transition plan, including a target to reduce operational emissions by 90% by 2030, compared to 2019 levels.
Political headwinds to the transition do not preclude insurance opportunities, instead making the need for risk management solutions even more apparent. Even with more limited efforts to reduce emissions and mitigate climate change, there will be increasing need for adaptation and resilience and (re)insurance is surely a critical player in this.
Abandoned targets or alliances can feel like a failure. But in our view, and clearly in the view of some large (re)insurance players, the opportunities in this space remain significant.
Summary
Fossil Fuels at Lloyd’s:
The new chief executive of Lloyd’s, Patrick Tiernan, has scrapped his predecessor’s commitment to end insurance coverage for the most polluting fossil fuels. Back in 2020, the corporation pledged to end insurance cover for and investment in thermal coal-fired power plants, thermal coal mines, oil sands and new Arctic energy exploration. Now, Lloyd’s will no longer ask insurers to stop providing cover for these activities. The explanation given was that Lloyd’s intends to remain apolitical and is subject to competition and antitrust laws.
Nat Cat Losses:
Estimates from Munich Re suggest that global insured losses from natural catastrophe events reached $80 billion in H1 2025. This is the second-highest H1 figure since records began in 1980, behind only H1 2011 when losses were driven by the earthquake and tsunami in Japan. During H1, 98% of insured losses were caused by weather disasters, with the US accounting for the largest share, primarily due to the Los Angeles wildfires.
Carbon Credit Insurance:
Marsh announced the placement of a carbon credit insurance policy for Chestnut Carbon, helping to protect the New York-based nature-based carbon removal developer from non-delivery risk. Chestnut signed a long-term agreement to acquire and restore 60,000 acres of native biodiversity with Microsoft Corporation to help them achieve their goal of being carbon negative by 2030. The insurance policy, underwritten by CFC, derisks Chestnut’s non-recourse project finance credit facility which provides up to $210 million for carbon removal.
New Offerings:
Oka, a US-based insurer of carbon credits, have announced their expansion further into green credit insurance. As well as their existing suite of carbon products, Oka now offer a broader sustainable finance remit across clean energy and renewable industries. For example, their transition project financing insurance covers prepayments for climate transition projects and their green and blue financing insurance covers buy-to-hold green and blue bonds.
Tokio Marine have introduced a new platform, Tokio Marine GX (TMGX), to serve clients looking to meet decarbonisation targets. The platform will offer insurance and risk advisory services with the aim of enabling capital investment in sustainable initiatives such as renewable energy and power, including credit and surety products. Building on GCube (the specialist renewable energy MGA acquired by Tokio Marine HCC back in 2020), the new unit will have a strong lead proposition, with up to $500 million capacity per risk.
Renewable Energy:
Specialist insurer Dale Underwriting Partners have announced that they will cease writing Offshore Energy as a standalone class of business. The decision was attributed to the firm’s evolving risk appetite and performance objectives, with chief executives restating commitments to supporting clients through the transition. As offshore energy projects increase in scale and complexity, geopolitical tensions and shifting trade policies have resulted in a challenging risk landscape for insurers.
Aviva has expanded its proposition for offshore renewable energy, doubling its capacity to £150m across global markets. Supported by the appointment of Roberts Proskovics to lead the Renewable Energy team within Aviva Risk Management Solutions, Aviva appear to be strengthening their technical capabilities as a lead market in renewable energy projects.
Transition Plan Guidance:
The UN-convened Forum for Insurance Transition to Net Zero launched its first transition plan guide for (re)insurers and brokers: ‘Underwriting the Transition.’ The guide aims to provide insurance market participants with a structured framework to help them create credible transition plans for their underwriting portfolios. It builds on the FIT Transition Plan Project’s first report, launched back at COP29 in Baku. The third and final deliverable of the Project, it aims to provide ‘total balance sheet’ transition plan guidance, linking underwriting to investment portfolios.
UK Resilience:
In the government’s spending review in June, Chancellor Rachel Reeves announced investment of £4.2bn in flood defence infrastructure from 2026-2029. Reeves connected the investment to the Government’s economic growth mission, stating that the funding will help boost resilience to flood-related damage. Voices from the insurance sector, such as RSA CUO Nathalie Dufrense, suggest that this commitment does not go far enough. Flood reinsurance scheme Flood Re welcomed the commitment but highlighted the importance of where and how this money is spent to improve insurability across the UK in the future.
Aviva and Zurich Resilience Solutions, in their roles in the Green Alliance Adaptation Taskforce, have published their report, ‘Adapt to thrive: preparing the UK for climate change’. The analysis focuses on impacts of climate change across the country, arguing that the UK are underprepared to tackle the scale of the challenge. The report identifies priority risks to address, ranging from risks to soil health from increased flooding through to risks to people and the economy from climate-related failure of the power system.
Claims Carbon Footprints:
Insurance data and analytics provider, Verisk, have announced the industry’s first Carbon Trust Assured Model for UK property claims. Verisk’s Property Claims Carbon Calculator enables insurers to measure (and therefore target to reduce) the carbon footprint of their claims. The Model was designed to meet growing demand for data-driven sustainability solutions in insurance and supports compliance with Scope 3 emissions reporting.
About the author
Anna Gardner is a Senior Consultant at Oxbow Partners who has worked on strategic engagements. She recently supported the design and implementation of a follow-only strategy for a global specialty insurer and writes about sustainability for Oxbow Partners’ publications. Anna has a particular specialism in carbon credits, having previously advised a provider of high-quality carbon credits on their communications strategy and led a delegation to the UN climate change conference at COP27. Anna holds a Masters degree in Geography from the University of Cambridge.
