Future of Net Zero Insurance Alliance in doubt as exodus continues

The Net Zero Insurance Alliance (NZIA) is facing an existential crisis as three more prominent insurance firms have excited the group.

Just before the weekend, AXA confirmed it will no longer participate in the UN-backed initiative. The Paris-based insurer explained it was leaving to "continue its individual sustainability journey."

In addition, German insurance giant Allianz and French reinsurer SCOR also walked away at the end of last week.

As a result, seven key members of the NZIA, which was launched in 2021, have now abandoned the alliance, which includes five of the eight original founding companies.

AXA's departure is particularly painful, since its chief risk officer, Renaud Guidée, chaired the alliance.

The NZIA is part of an alliance of bodies associated with The Glasgow Financial Alliance for Net Zero (GFANZ), a group that formed during the COP26 climate conference as a coalition of financial institutions committed to net zero.

Also associated with GFANZ is the Net Zero Asset Managers initiative, which saw Vanguard depart late in 2022.

Recent exodus

The latest departures come only weeks after Germany-based insurance giant Hannover Re confirmed to Net Zero Investor that it had decided to exit the NZIA.

In a statement last month, Hannover Re explained that it had decided to leave the NZIA after "careful consideration."

“Regardless of this, Hannover Re remains committed to its sustainability strategy, the associated goals and its support for the Paris Agreement, and aims to achieve full climate neutrality by 2050 at the latest,” the reinsurer stressed.

The company announced its net zero commitments in October 2021, which include a goal to get to net zero emissions by 2030 and in across its entire reinsurance portfolio two decades after that.

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Hannover Re's departure followed similar moves by Munich Re and Zurich in April of this year.

Swiss insurance group Zurich dropped out but did not provide any details. The company merely said: "We want to focus our resources to support our customers with their transition."

Zurich's departure came a few days after German rival Munich Re decided to walk out. Munich Re, one of the world’s largest reinsurance firms, cited antitrust risk.

The company insisted that it would still keep to its climate targets of reducing carbon emissions in its investment portfolio by 29% by 2025, and net zero by 2050.

Explaining the decision to leave the NZIA, Joachim Wenning, chief executive of Munich Re, said in March: “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.”

The NZIA has not yet publicly responded to the latest departures.

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