Climate campaigners have branded Lloyd’s of London as the insurance sector’s biggest villain when it comes to underwriting fossil fuel risks.

Reclaim Finance has today released the results of its new research which claims Lloyd’s of London is bucking the global trend by continuing to grow its fossil fuel business,

The group added that Lloyd’s estimated fossil fuel premiums have increased by 2.4% annually between 2020 and 2024, while other insurers have on average seen a decline.

“Lloyd’s remains the single largest global centre for fossil fuel insurance and appears to be abandoning any pretence of climate action, at the same time as other insurers move away from new coal, oil and gas, seeking prevention measures against climate risks,” it added. “Reclaim Finance is urging Lloyd’s and its managing agents to introduce policies to restrict underwriting for new fossil fuel projects.”

The analysis is based on estimates commissioned from market intelligence provider Insuramore covering 2020 to 2024 and concludes that Lloyd’s of London increased its fossil fuel business across the period, and so despite rapid growth in its sustainable energy business, Lloyd’s fossil fuel business remained more than four times larger in 2024. This makes Lloyd’s the single biggest centre for fossil fuel insurance, with 9% of the global market.

The study added in the same period, the global market excluding Lloyd’s saw an annual decline of 2.8% in premiums for fossil fuels.

“Hiscox, one of the largest managing agents operating in the Lloyd’s market, is one of the market’s biggest backers of fossil fuels, with more than 9% of its direct insurance premiums from fossil fuels,” Reclaim Finance added. “This compares to an average of 4% across the Lloyd’s market.”

Commenting on the findings, Luke Whiting, UK insurance campaigner at Reclaim Finance says: “Lloyd’s of London wants to both have its cake and eat it. It is growing a sustainable energy business in the name of the transition but growing its fossil fuel business at the same time. There is no room for new coal or new oil and gas in the transition to sustainable energy. By continuing to support fossil fuel expansion, Lloyd’s is undermining other insurers’ efforts to prevent climate risk and condemning us all to a future of climate chaos.”

The report said Lloyd’s growing fossil fuel business leaves it increasingly misaligned with global climate goals, as well as its own climate pledges.

“According to the International Energy Agency’s Net Zero Emissions scenario, to meet the 2050 net zero target with no or limited overshoot, fossil fuel production must decline, with oil and gas production falling by 22% and 14% respectively by 2030,” It continued. “According to the scenario, new coal mines, oil & gas fields or LNG export terminals will put the net zero target at risk.

“Similarly, to align with the Science Based Targets initiative’s Financial Institutions Net Zero Standard (SBTi FINZ), insurers must stop underwriting new coal, oil and gas projects.”

The group concluded: “Lloyd’s of London already stands out among European insurers for its lack of climate policies, with the new CEO Patrick Tiernan telling the Financial Times in September that he will ‘no longer ask insurers to stop providing insurance cover for coal or other planet-warming fossil fuels’.

“In contrast, all other 11 major European re/insurers besides Lloyd’s now refuse to underwrite risks related to new upstream oil and gas projects.”

“Hiscox, one of the largest managing agents operating in the Lloyd’s market, is one of the market’s biggest backers of fossil fuels, with more than 9% of its direct insurance premiums from fossil fuels,” Reclaim Finance added. “This compares to an average of 4% across the Lloyd’s market.”