Insurance marketplace Lloyd's of London, along with syndicates managed by Hiscox Ltd (LSE:HSX), Beazley PLC (LSE:BEZ), AXA and AS Amlin, have been called out for not supporting anti-climate activities.
Analysis by Reclaim Finance, a non-profit organisation, found that just five of Lloyd’s 51 managing agents have policies restricting cover for new coal projects and new oil & gas fields.
While some major insurers have defined restrictions about underwriting for fossil fuel projects, Lloyd's has just outsourced decision-making on underwriting these activities to syndicate members.
Also, a report from the NGO highlighted that while Lloyd's has a three-year plan steering clients and agents toward greener practices, no stricter enforcement is on the cards.
"Lloyd’s of London likes to present itself as championing the transition, but in reality, it is allowing the fossil fuel industry to carry on expanding," said Reclaim's insurance sector head, Ariel Le Bourdonnec.
"Lloyd’s has the power and responsibility to control its own market, but has chosen not to do so, giving its managing agents free rein to turn its net zero promise into an empty pledge.
"As a result, it has become the insurer of choice for fossil fuel expansion. If the Lloyd’s market wants to be taken seriously as a leading player in the transition, its managing agents need policies now."
Beazley Furlonge, Hiscox Syndicates, MS Amlin Underwriting and Tokio Marine Kiln Syndicate are among the syndicates without a policy on oil & gas expansion.
Reclaim noted that Beazley Furlonge, Axis Managing Agency and Brit Syndicates have signed a contract with the Polish National Oil Company, despite having policies on restricting underwriting for oil and gas-related risks in the Arctic region, which is the source for 30% of PGNiG’s oil and gas production.
Talbot Underwriting provided cover for the second-largest LNG export terminal in the US, Freeport LNG, between 2022 and 2023. The terminal is notorious for violating Texas’ state air pollution rules multiple times between 2019 and 2021.