Will More Insurers Take a Step Back From The NZIA Bandwagon? -

pexels-sam-forson-243138 wind turbine risk

Two giants of the insurance world have both decided to leave the Net Zero Insurance Alliance, in a bold move which has angered all types of climate activists, although mainstream politicians have made no comment on the decision. The Alliance is both a talking shop for the transition from carbon economy to something greener, perhaps more feudal/communist, and a powerful group of asset management and banking brands, which can deploy that investment firepower through the global markets. In short, if you wanted finance for major wind, solar or battery car projects, then the NZIA would be a good place to be, alongside the WEF, UN, EU and other NGO associations.

But as Vanguard noted in 2022, it’s difficult to promise investors a healthy long term profit if all you invest in are ESG compliant social welfare and green energy projects, since many of them have a potential to make zero profit. Not net zero, an actual zero on the balance sheet. Once those older electric cars beigin to lose the ability to hold a charge, you are left with millions of hard to recycle – and unrechargable – lithium battery packs being stored in a warehouse somewhere.

On a side note, there is no credible evidence that achieving Net Zero will actually alter the fundamental reality of climate change. It just changes, that’s how Pangea became the modern array of continents we enjoy today.

A SOVIET STYLE BLOC, OR INDEPENDENT INSURERS, WHICH IS IT?

There is also the issue of insurance brands working as a Net Zero cartel and imposing T&Cs on cover, or withdrawing insurance completely as a bloc, and therefore having to fight legal cases in the future. If you destroy large companies’ operations in North America, Europe or other developed regions by cancelling cover, so they are forced to pack up and move to India or China where a more, shall we say, relaxed atttitude to Net Zero compliance is the norm, then you may well be liable for that groupthink decision. Actions have consequences.

Joachim Wenning, CEO of Munich Re, commented on the decision;

“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.”

ZURICH FOLLOWS SUIT, WHO WILL BE NEXT?

Like Munich Re Zurich want to do their own thing on decarbonising their portfolio. Any reasonable person would agree that is their right as a public company with their own shareholders, plus local regulators in every market they operate in watching over them. Here’s the word;

“After establishing a standardized methodology for measuring and disclosing greenhouse gas (GHG) emissions associated to insurance and reinsurance underwriting portfolios, we want to focus our resources to support our customers with their transition. We continue to remain fully committed to our sustainability ambitions and to supporting the net-zero transition.”

IE thinks that there is another factor at play here; the natural secrecy of large insurers when it comes to policies written, assets being valued, plus legacy data which would have to be shared in any climate change alliance. How else could you benchmark performance and targets? That NZIA dogma not only acts as a shared portal on data and actions going forward, but also limits the ability of ANY insurer to take a decision on Net Zero of their own volition. In short it reduces innovation and R&D, since any benefit has to be shared with the laggards at the back. Yeah, we know it’s a brutal analogy, but it’s true.

IE thinks that it won’t be long before Lloyd’s of London and Tokio Marine also take the decision to leave the NZIA. Lloyd’s was, and in some ways, still is a pioneer when it comes to insurance. The London Market also has the benefit of being outside the dead hand of EU regulation – to a point – and so can be more agile and creative when it comes to backing new technologies, or setting new T&Cs on industrial, or carbon intensive activities.

If you look at the recent statement by Akio Toyoda of Toyota on electric cars vs hydrogen, you can see that Japanese companies understand there will be shortages of battery components, which will restrict the production and sale of pure electric cars. Toyoda also made the point that a switch to all electric car manufacturing would actually INCREASE global emissions, not reduce them, since millions of tons of water, vast mining projects, global distribution miles on parts, plus energy costs etc all add up when chucking out old production and supply lines, then building new ones.

EXPECT A SUMMER OF STUNTS, ROADBLOCKS & RAGE FROM NET ZERO ZEALOTS

Naturally climate change activists are upset about the Zurich move, since any opposition to the almost religious ideology which underpins climate change policies is deemed to be a type of heresy. Insurance brands based in London can expect plenty of protests from public sector activists during the term holidays, since climate protest is essentially street theatre for a white, wealthy middle class cadre, brought up on Corbyn chants at Glasto and private school trust funds.

Here’s the response from protest group Insure Our Future,

Insure Our Future campaign responds to Zurich’s exit from the NZIA

Following Munich Re, Zurich is the second founding member of the Net Zero Insurance Alliance to leave the NZIA in recent days. The Swiss insurer claims it wants “to focus our resources to support our customers with their transition”.

Jennifer Buchli from Campax comments on the decision: “Unlike Munich Re and other peers, Zurich continues to underwrite new oil and gas projects. It is not credible for Zurich to engage their customers on the net zero transition as long as the insurer doesn’t end their support for the expansion of oil and gas extraction themselves.”

REGULATION NEVER SLEEPS

For all the screaming and childish tantrums from climate activist groups, the real power insurers need to be concerned about is that held by regulators. Which is immense and fully onboard with the green/WEF agenda. For example you can’t even hire a white man at Board level in the UK without explaining your decision in writing to the FCA. Certainly any UK insurance brand which decided to insure a new coal mine in Cumbria would experience the full weight of wokery from those embedded in various UK government departments, councils, the FCA, environmental quangos etc. It’s a non-starter, no matter which association you belong to, or withdraw from.

That’s the reality of the UK and EU insurance market, it is restricted by green policies first, and then the individual T&Cs and wordings of the underwriters second. St Greta and her wealthy chums have nothing to fear from a reduced membership at the NZIA, their jet-set, Instagrammable, lifestyle activism can continue as backroom regulators set the standards on what can – or cannot – be insured.