Munich Re is withdrawing from an industry-wide alliance of insurers focused on reducing carbon emissions.
The carrier pledged to stick to its own climate targets but said it would exit the Net-Zero Insurance Alliance (NZIA) to avoid antitrust risks.
Companies in Europe belonging to climate alliances and keen to increase co-operation have been concerned about possibly breaching anti-competition laws in the process, prompting some regulators to explain how they will ease the rules.
For example, the UK’s Competition and Markets Authority published draft guidance last month on how competition law applies to sustainability agreements between firms. It said the guidance should give firms greater certainty about when agreements “that genuinely contribute to addressing climate change will be exempt from competition law.”
The UN-convened NZIA is a group of 30 insurers and reinsurers representing approximately 15% of world premium volume globally, who together aim to transition their underwriting portfolios to net-zero greenhouse gas emissions by 2050.
In a statement Munich Re CEO Joachim Wenning said: “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.”
Wenning added that that Munich Re would stick to its climate goals outside of the NZIA, including a first step target of reducing greenhouse gas emissions related to its investment portfolio by 29% by the end of 2025, and thereafter successively brought down to net zero by 2050.
At the same time, the company plans to 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 ceased insuring new coal-fired plants, coal mines and since 2019 oil sand mines.
“Our climate commitment is unwavering,” Wenning said. “We follow scientific recommendations. To date we are decarbonising even faster than what is required to reach net zero by 2050.”