Three of Europe’s biggest insurers have quit the Net-Zero Insurance Alliance as growing US political pressure and legal fears plunge the climate initiative into crisis.
Axa, the group’s former chair, Allianz and Scor said on Thursday that they were leaving the NZIA, which is one part of Mark Carney’s umbrella group Glasgow Financial Alliance for Net Zero, created by the former Bank of England governor ahead of the UN climate summit held in Glasgow in 2021.
The departures bring the total number of large insurers which have left the NZIA to seven, severely curbing its collective power and posing a question over its future. Its website listed 23 members on Thursday.
Gfanz and its members have come under attack from Republican politicians in the US, who are targeting collective climate action groups they perceive to be unfairly hitting the oil and gas industry.
Other than a high-profile departure from the US asset manager Vanguard in December, Gfanz’s asset management, banking and asset owner subgroups have mostly weathered the storm. Gfanz did not immediately respond to a request for comment.
However, its insurance arm, the NZIA, has struggled to gain members outside of Europe and Asia. And, earlier this month, its members were sent a letter from US state attorneys-general raising “serious concerns” over whether the alliance complied with antitrust laws.
Munich Re, one of the world’s biggest reinsurers and a founding member of the NZIA, quit the group in late March. Its chief executive said he did not want to expose the group to “material antitrust risks”.
Zurich, an insurance group, and Hannover Re, another reinsurer, left in April. Reinsurer Swiss Re also left earlier this week.
“As the Net-Zero Insurance Alliance disintegrates before our eyes, we must ask why these huge companies with their hordes of lawyers did not see antitrust issues as a major obstacle when they founded the alliance. And we must wonder whether their ditching of the alliance has more to do with fears of losing business in the US than real legal jeopardy,” said Patrick McCully, senior analyst at the non-profit Reclaim Finance.
Two people briefed on the decisions by insurers to quit said they did not think that the initiative, which has considered competition issues from the start, would lose a legal fight, but feared the distraction it would cause. “This is a battle that insurers can spare themselves,” said one.
European governments have also privately…
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