Climate campaigners have released new research which names and shames the underwriters they say are fueling ongoing oil and gas production in Brazil.
Insure our Future has published its latest report, Fueling Climate Change: The Insurers Behind Brazil’s Offshore Oil Expansion which said Chubb, MAPFRE, and Tokio Marine are insuring the majority of Brazil’s offshore oil and gas drilling.
Based on previously undisclosed documents, the group said the report finds that the three companies insure Brazil’s national oil company Petrobras, which extracts nearly 93% of all Brazil’s oil and gas. Chubb and Tokio Marine, along with AXA, Liberty Mutual, Fairfax, Argo, and several Brazilian insurers, also insure exploratory oil and gas operations by international companies.
“Brazil — Petrobras in particular — plans to massively expand offshore oil and gas operations,” the report stated. “This directly contradicts the scientific consensus on the need to immediately end fossil fuel expansion. According to the UN, we must decrease oil and gas production by 4 and 3% respectively every year.
“Yet Brazil plans to expand oil production by up to 70% over the next decade as part of its ruthless extractivism. By supporting these efforts, insurers are driving climate catastrophe.”
Ilan Zugman, Latin America Director at 350.org, said: “It is completely absurd that international insurance companies like Chubb, MAPFRE, and Tokio Marine come to Brazil to support the fossil fuel industry extracting oil from some of the most sensitive regions of the planet.”
Zugman added: “The expansion of the oil and gas sector, in addition to keeping Brazil from meeting its Paris Agreement goals, also has the potential to negatively impact the lives of millions of Brazilians already in vulnerable situations such as traditional fishermen, Quilombolas, and Indigenous Peoples. As a sad example, communities impacted by the largest oil spill in Brazil’s history, in 2019, have yet to receive proper compensation and still find remnants of oil in their territories.”.
“Oil and gas projects and their associated spills would not take place if insurance companies refused to support them,” added the report. “Already, the 35 insurers that have restricted coverage for coal have led to reduced coverage, soaring premiums, and some projects failing to get coverage at all. Insurers can have the same impact on oil and gas, where 10 insurers control more than 70% of the market.”
Axa is also criticised in the report.
“Axa, which has previously been called a leader on climate, adopted an oil and gas policy in late 2021,” it explained. “However, it does not rule out all oil and gas expansion, and leaves the door open for Axa to continue supporting exploratory operations in the Potiguar Basin. Potiguar overlaps with the Fernando de Noronha Marine National Park and the Rocas Atoll — the first established national marine protection zone and habitat to the blue whale.”
Louis-Maxence Delaporte, fossil free finance campaigner at Reclaim Finance, said: “The fact that Axa can keep insuring oil companies and projects in one of the planet’s biodiversity and marine life hotspots goes to show that Axa’s current policy is both porous and ineffectual. Axa’s policy should be as clear cut as the IEA’s net zero pathway, and immediately rule out insurance coverage for any and all new oil and gas projects.”
“Axa, along with Tokio Marine, Chubb, Liberty Mutual, Fairfax, and Argo — provide insurance in the form of performance bonds. These bonds allow oil companies to meet the Brazilian government’s requirement to provide a financial guarantee that they will do a minimum level of exploration,” said the report.