Australian insurers should follow Allianz’s lead and begin divesting from fossil fuels, according to environmental group Market Forces.

Analyst and campaigner Dan Gocher told insuranceNEWS.com.au local insurers lag behind the rest of the world in taking responsibility for their role in climate change.

“General insurers are at the forefront of climate change because they face declining profits due to the increasing frequency and severity of natural disasters,” Mr Gocher said.

Market Forces says IAG, QBE and Suncorp have sustained significant losses in the past five years, with claims for natural disasters far exceeding their provisions. It says the losses comprise $1.29 billion for QBE, $1.12 billion for Suncorp and $364 million for IAG.

“At the same time, general insurers support the fossil fuel industry through underwriting mining projects and fossil fuel investments in their asset management portfolios,” Mr Gocher said.

He estimates IAG, QBE and Suncorp have “hundreds of millions” of dollars invested in fossil fuels.

“It seems hypocritical to me that insurers talk about mitigation but not the cause.”

Local insurers must disclose details of their investment portfolios to the Australian Prudential Regulation Authority (APRA) only.

Last month California’s Insurance Commissioner Dave Jones called for the US state’s insurance industry to divest from coal investments, and introduced a new requirement for disclosure of carbon-based investments.

IAG, QBE and Suncorp all participate in the Carbon Disclosure Project, but none disclose Scope 3 emissions – indirect emissions that might come from businesses they underwrite or invest in.

Market Forces wants insurers to disclose their “carbon intensity” – how much carbon dioxide is emitted per million dollars invested.

“Transparency is an issue across the industry, which we hope will be addressed by the Greens’ Senate inquiry into carbon risk disclosure,” Mr Gocher said.

“With a regulator that refuses to acknowledge the vast impacts of climate change on the financial services sector, the insurance industry simply isn’t required to take action.”

APRA declined to comment to insuranceNEWS.com.au.

Last November global insurer Allianz announced plans to divest coal from its portfolios over the following six months.

A month earlier, 15 UK general insurers signed an open letter to Bank of England Governor Mark Carney urging him to take more aggressive action on climate change.

An IAG spokesman says the company is a carbon-neutral organisation that “works tirelessly to mitigate the risks climate change may have to our business, communities and economy”.

The spokesman says IAG is a member of the Geneva Association, which tackles a number of issues including climate change.

Insurance Council of Australia (ICA) GM Communications Campbell Fuller told insuranceNEWS.com.au that insurers closely monitor climate trends and developments in climate science.

“The climate change signal that may be present is being overwhelmed by the losses directly attributable to population changes, building costs and codes and land-use planning,” he said.

“It is not ICA’s role to oversee, influence or intervene in the investment or business decisions of its members, including those relating to fossil fuels.”

Suncorp and QBE were unavailable for comment.