New brief shows that fossil fuel insurers are heavily exposed to fossil fuels, with $30.8 billion in oil and gas holdings as of 2019.
WASHINGTON, D.C – Analysis finds that North American fossil fuel insurers had $59.7 billion in fossil fuel investments—including $30.8 billion in oil and gas—according to recently released 2019 data. The brief finds that 10 insurance companies including American International Group (AIG), Berkshire Hathaway, Travelers, Chubb, The Hartford, and Liberty Mutual were heavily invested in fossil fuels as of 2019.
“Major insurers like AIG and Berkshire Hathaway are spelling disaster for our climate and their own business by investing billions in—and insuring—planet-wrecking companies. AIG’s climate commitments are empty words as long as it continues to invest in the oil and gas industry and enable the dangerous buildout of new polluting infrastructure.”
The analysis, published by the Insure Our Future campaign, finds that Berkshire Hathaway and AIG had the largest investments in oil and gas in 2019, at $20.66 million and $5.91 million, respectively. AIG’s fossil fuel investments made up 11.40% of its assets under management for the subsidiaries analyzed, indicating that the company was highly exposed to fossil fuels as of 2019.
"While U.S. insurers claim to be concerned about the climate crisis, their massive investments in fossil fuel companies tells another story. Instead of tackling their outsized role in enabling carbon pollution, insurance giants like AIG and Berkshire Hathaway are providing a lifeline to the fossil fuel industry through their investing, fueling more dangerous climate disasters like floods, wildfires, and hurricanes.”
Several of the insurance companies covered by the analysis have adopted restrictions on their support for specific sectors including coal, tar sands, and Arctic oil and gas since 2019. However, while a growing number of global insurers are restricting insurance and investments in oil and gas, the North American companies analyzed have not adopted similar policies. Thus, it is unlikely that the companies have dramatically reduced their exposure to oil and gas since the data was collected, the brief concludes.
The 2019 data was released in April of 2022 by the California Department of Insurance, underscoring the need for more timely disclosures of insurers’ fossil fuel exposure. The insurance industry is not required to disclose its investments or underwriting of fossil fuels. A bill introduced in California earlier this year sought to change that, but failed to move forwards. Robust disclosure requirements are necessary to provide consumers and regulators with insight into insurers’ climate risks—and contributions.
Insurers’ exposure to fossil fuel investments threaten their financial stability by increasing their risk of stranded assets and risking their ability to meet claims obligations. Moody’s Investor Service found that insurers’ retreat from fossil fuels is credit positive, reducing their risk of stranded assets and climate change liability. Société Générale analysts further concluded that if insurers withdraw from oil and gas, they could unlock a “green valuation premium.”
