World’s largest reinsurer Munich Re quits UN’s Net-Zero Insurance Alliance

Munich Re, the largest global reinsurer by premiums, has discontinued its membership in the Net-Zero Insurance Alliance (NZIA).

The company’s CEO cited “material antitrust risks” as limiting the scope of its decarbonisation goals, adding that it sees greater value in pursuing its climate strategy individually by taking a science-based approach, which would enable Munich Re to achieve decarbonisation goals even faster than what is required by NZIA to reach net zero.

“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," said Joachim Wenning, CEO of Munich Re.

“Our climate commitment is unwavering. We follow scientific recommendations. To date we are decarbonising even faster than what is required to reach net zero by 2050," Wenning stated.

Munich Re has committed to climate targets including reducing GHG emissions related to the investment portfolio by 29% by the end of 2025, and thereafter successively brought down to net zero by 2050.

For the exploration and production of oil and natural gas (primary insurance, direct and facultative reinsurance), Munich Re claims that it will reduce its climate-related industry exposure in a way that there will be no associated net GHG emissions by 2050. It aims to reduce emissions by 5% by 2025.

As of April 2023, Munich Re will not insure projects involving new oil and gas fields or new midstream oil infrastructure. Furthermore, it will 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 stopped insuring new coal-fired plants, coal mines and since 2019 oil sand mines.

For emissions from its own operations, Munich Re says it 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.

By 2030, Munich Re expects to achieve net-zero GHG emissions in its operations.

Earlier this month, property/casualty carrier Chubb revealed that it has adopted new underwriting standards for oil and gas extraction projects, but won’t be committing to “sweeping net-zero pledges” as it doesn’t see it as a viable path to achieve.

“As a company, we are accelerating and expanding our climate-related initiatives without committing to sweeping net-zero pledges for which, in our judgment, there is not a viable path to achieve,” Chubb’s CEO Evan Greenberg argued.

“We will continue to pursue in earnest a responsible, realistic and science-based approach,” he said.

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