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A damning report into the transparency and investments of 23 home and motor insurance underwriting companies has revealed a stark industry-wide failure to tackle climate change, prompting calls for leaders in the sector to stop ‘dragging their heels’.
With total UK insurance premium investments totalling £143 billion in 2017 and generating 90% of profits, researchers at Ethical Consumer scrutinised company investment practices, commitment to carbon reduction and the extent of granular targets and reporting.
Each company in the study received Ethical Consumer’s ‘worst’ rating, largely failing across its environmental and carbon assessment criteria.
The criteria include: visible public policies that report on emissions from investments; a commitment to fossil-free investment and a future target in line with international agreements.
Companies were also assessed on the companies they provide insurance for.
Some companies did do better than others. Zurich, AXA, Aviva, RSA, Allianz and Covéa report on the climate impact of their investments and are aiming to reduce them.
Esure’s brands, Esure and Sheila’s Wheels, received the worst overall rating for ‘opaque’ investments, among other factors. Esure was labelled a company to avoid.
J.C. Flowers (UK General) had no climate reporting. NFU Mutual, esure, Direct Line (Churchill), EUI (Admiral) and Hastings just talked about the climate impact of their offices.
‘At a global level, insurers are the second largest group of institutional investors after pension funds. This means that the most crucial aspect of an insurance company for ethical consumers will be its investment policy.
‘However, consumers just can’t access the information they need to understand where and how their insurance premiums are being invested. Consumers are inadvertently funding unethical activities like coal-fired power stations and white phosphorus weapons.
‘While we understand insurers seek to strike a balance against risk, industry is in complete denial if it does not realise that it needs to address the impact of its investments.’
JOSIE WEXLER
Report author, Ethical Consumer
In addition to the climate ratings researchers also looked at the voting record of insurance companies at the AGMs of those they invested in.
15 out of the 23 underwriting companies were recorded as ‘bottom of the pile’ on transparency, meaning that they didn’t reveal their voting history. These were:
1. Admiral insurance
2. Ageas insurance
3. Churchill home insurance
4. Covea home insurance
5. Direct Line home insurance
6. Hastings Direct insurance
7. Hiscox home insurance
8. Lloyds bank insurance
9. MORE TH>N home insurance (RSA Insurance Group plc)
10. NFU Mutual insurance
11. Sheila’s Wheels insurance
12. Tesco home insurance
13. UK General home insurance
14. Zurich insurance
15. esure insurance
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