Global reinsurer Munich Re has announced the discontinuation of its membership in the Net-Zero Insurance Alliance (NZIA), citing antitrust risks as limiting the scope of its decarbonisation goals.
The UN-convened NZIA is a group of 30 insurers and reinsurers representing approximately 15% of world premium volume globally, who together aim to transition their underwriting portfolios to net-zero greenhouse gas emissions by 2050.
But in an announcement today, Munich Re CEO Joachim Wenning explained that he now views the Alliance as restrictive to his company’s climate targets going forward.
“In our view, the opportunities to pursue decarbonisation goals in a collective approach among insurers worldwide without exposing ourselves to material antitrust risks are so limited that it is more effective to pursue our climate ambition to reduce global warming individually,” Wenning said.
Nevertheless, he assured that Munich Re would stick to its climate goals outside of the NZIA, including a first step target of reducing greenhouse gas emissions related to its investment portfolio by 29% by the end of 2025, and thereafter successively brought down to net zero by 2050.
As for the exploration and production of oil and natural gas as relates to its primary insurance, direct and facultative reinsurance, Munich Re has further committed to reducing its climate-related industry exposure in such a way that there will be no associated net GHG emissions by 2050.
Towards this end, the reinsurer will aim to reduce emissions by 5% by 2025, and will not insure projects involving new oil and gas fields or new midstream oil infrastructure as of April 2023.
At the same time, the company plans to reduce thermal-coal-related exposure in its direct and facultative insurance business by 35% group-wide by 2025, before eliminating this exposure altogether by 2040. Since 2018, Munich Re has ceased insuring new coal-fired plants, coal mines and since 2019 oil sand mines.
“Our climate commitment is unwavering,” Wenning assured. “We follow scientific recommendations. To date we are decarbonizing even faster than what is required to reach net zero by 2050.”
Regarding the emissions from its own operations, Munich Re has been carbon-neutral since 2015 and previously reduced CO2 emissions per employee by 44% from 2009 to 2019. Current GHG emissions are to be reduced by a further 12% per employee by 2025 and, by 2030, Munich Re expects to achieve net-zero GHG emissions in its operations.
The NZIA recently launched its first Target-Setting Protocol at the World Economic Forum’s Annual Meeting in Davos, Switzerland in a move described as a “landmark breakthrough” by Chair and AXA CRO Renaud Guidée. The Protocol is designed to enable NZIA members to begin to independently set intermediate targets for their underwriting portfolios in line with a net-zero transition pathway.
