Major insurers are still underwriting fossil fuel projects and while several have moved away from coal, the industry’s support for oil and gas production facilities is undermining the green transition, a global climate activist group says.

Insure Our Future says most insurers continue to underwrite the expansion of oil and gas infrastructure and while some have adopted bold restrictions covering upstream oil and gas as well as mid- and downstream oil projects, many other policies are extremely limited.

The group’s latest annual scorecard of 30 insurers found they scored 3.8 points on average out of a best possible 10 for their coal exit policies and only 1.4 for their restrictions on oil and gas.

“It is 50 years since the insurance industry first warned about the risks of climate change…yet after half a century, the industry’s climate actions remain completely insufficient,” Insure Our Future says.

The group says insurers talk a lot about the need for oil and gas companies to transition away from fossil fuels but “in reality, they are not advocating for a transition away from fossil fuel extraction”.

“[Insurers] are satisfied if fossil fuel companies adopt shallow net zero commitments, shift from coal to gas extraction, invest in renewable energy projects and reduce their operational emissions,” Insure Our Future says.

“This does nothing to reduce the climate impact of burning the oil and gas these companies sell, which is by far the biggest part of their life-cycle emissions.”

The group says although some insurers have introduced significant restrictions on fossil fuels, none are aligned with the 1.5-degree target set by the 2015 Paris Agreement.

“Insurance companies argue that they can’t align their businesses with a 1.5-degree pathway if society at large moves towards 2.7 of global warming,” Insure Our Future says.

“While this may be true, insurance companies are not making a strong effort to accelerate the necessary transition. Most are only prepared to implement net zero commitments as long as they don’t affect their short-term profits.”

As the climate crisis escalates, numerous insurance companies are withdrawing their cover from regions particularly affected by climate change in Australia, the US and other countries, the group says.

“While companies abandon communities affected by climate risks, they continue to fuel the climate crisis by underwriting and investing in the expansion of fossil fuels.”

In the 2023 scorecard, QBE is the only insurer from Australia on the list. QBE placed 16^th with an overall score of 2.11 points. It scored 4 points for coal underwriting and 1.2 points for oil and gas underwriting.

Insure Our Future says the top three places in the scorecard have been left blank as a symbol of insurers’ failure to adequately respond to the climate emergency.

Allianz placed fourth, the best of the 30 insurers with an overall score of 6.63 and six insurers shared last place with zero points and they include Berkshire Hathaway and W.R. Berkley.