Lloyd’s announced its resignation as a member organisation from the Net Zero Insurance Alliance with immediate effect on Friday. This makes it the tenth major insurance and reinsurance player to offer its resignation since last week.
Lloyd’s, the insurance and reinsurance market in London, mentioned in a statement that it will continue to support the UN’s Principles for Sustainable Insurance and Sustainable Development Goals.
The company said it remains committed to delivering its sustainability strategy including supporting the global economy’s transition.
Looking back to the comments made by Lloyd’s John Neal, the Chief Executive of Lloyd’s, while speaking with Reuters, he urged the global climate alliance for insurers to make its membership rules less prescriptive or risk falling apart, after political pressure from some U.S. states that have caused companies to leave. This move doesn’t come as a surprise.
With some major re/insurers having withdrawn from the Net-Zero Insurance Alliance (NZIA), the United Nations Environment Programme (UNEP) has stated that there’s a “fundamental and urgent” need for collaboration with the global insurance industry to tackle the climate emergency successfully.
To recap events of last week, reinsurance giant Swiss Re withdrew from the NZIA, which was convened by UNEP Finance Initiative’s Principles for Sustainable Insurance (PSI) at the G20 Climate Summit in Venice in 2021. Scor, Munich Re, Zurich Insurance and Hannover Re have already made their exits.
The speculated reasons for these are that many companies are now withdrawing so they aren’t exposed to anti-trust claims.
Meanwhile, another reason for this could be a fear of losing business in the US, if they continue to push the net-zero agenda while lawmakers on the Republican side are pushing back on ESG.