Majority of directors of world’s top insurance companies tied to polluting


Credit: DeSmog

Just over half of all directors at 30 of the world’s largest insurance companies have affiliations to polluting companies and organizations, reveals an investigation by DeSmog, including several individuals holding senior roles at some of the world’s largest energy companies.

The findings raise concerns over a potential pervasive conflict of interest on the boards at a time when the international insurance sector is under pressure to halt its support for the fossil fuel industry.

Positions held by the insurance directors analyzed ranged from director and advisory roles, including current roles at ExxonMobil, Total, and RWE, along with current and former memberships to industry trade association and think tanks, such as the U.S. Chamber of Commerce.

DeSmog analyzed director CVs on company profiles, LinkedIn pages, official filings, and news clippings from July 2021, logging the past and present work experience of 371 insurance directors who currently sit on the boards of 30 of the world’s largest property and casualty insurers.

The research reveals that 53 percent of these directors have a combined 499 past or current connections to industries that could be considered potentially climate-conflicted including polluting energy, mining, manufacturing, along with banks and investment vehicles known to support the fossil fuel industry. 

Just over one in ten directors across the insurers analyzed worldwide had experience at companies operating in fossil fuels, including oil and gas companies, a major coal developer, and utility companies relying on fossil fuels for the power they produce. In the U.S. this number jumped to one in five board members across the insurers analyzed.

The links revealed by DeSmog’s analysis may show a “revolving door” between insurers and high-polluting industries that may explain why, despite the risks, the sector has been slow to act on climate change, said Lucie Pinson, executive director at the environmental campaign group Reclaim Finance, reacting to the findings.

“When insurers underwrite fossil fuels, they actually are underwriting climate change.”

Yevgeny Shrago, a policy counsel in climate change for advocacy group Public Citizen

The investigation focussed on directors as they are the ones with ultimate oversight over strategic and regulatory decisions for the insurance companies. Among their powers, directors have the ability to vote on resolutions which dictate key decisions made by the company at annual general meetings. In recent years these meetings have been targeted by activists and investors calling for insurers to stop supporting the fossil fuel industry.

The revelations come as a growing number of insurance companies have announced they will limit the services they provide to the most polluting fossil fuel projects, such as by limiting or ending the insurance they provide for coal and tar sands projects.

Despite a growing trend away from the most-emitting developments, however, nearly all leading insurers, including those analyzed, continue to provide insurance coverage for oil and gas projects and many still provide at least limited support for coal developments, including through what campaigners have said are “loopholes” in their coal exclusion policies.

Only one insurer in the world, Australia’s Suncorp, has announced it will restrict its support for oil and gas projects worldwide, according to a report from campaigners at Insure Our Future ranking the climate policies of major property and casualty insurers last year. While Suncorp was not included in this analysis, many of the same companies in DeSmog’s analysis feature on the ranking.

For years, experts have warned that under strong climate action to limit temperature increase below 2 degrees Celsius, the world must dramatically limit the extraction and use of fossil fuels. This means fossil fuel projects could become financially risky “stranded assets,” according to analysts. 

“There are two major sets of risks for insurers being involved in fossil fuels,” explained Yevgeny Shrago, a policy counsel in climate change for advocacy group Public Citizen.

“The first risk is what we call transition risk,” Shrago said. “These are assets that are going to lose their value very quickly” and unpredictably. While an insurer invested in fossil fuels currently may be getting a large return on them now, Shrago said, this could change at any moment.

“The longer term risk we see,” Shrago continued, “is that when insurers underwrite fossil fuels, they actually are underwriting climate change. The IPCC is very clear that every fraction of a degree matters when it comes to averting physical risk.”

“What that means is that if an insurer enables a new fossil fuel project to go forward, it’s actually then contributing to increased climate harm. Increased climate harm means higher insured losses and greater pressure on solvency in the future.”

DeSmog’s findings on the experience of directors’ on insurance boards may help illuminate why, despite the risks, the sector had been slow to act, added Shrago. 

“There’s actually a premium for insurance companies to stop insuring coal, stop insuring oil and gas, exit those industries, and yet they continue to do so. Which raises the obvious question, why? Why are they still doing that?” Shrago said.

Ties to Big Oil 

A deeper look into the data shows that roughly one in ten directors had past or current ties to the polluting energy sector. And 6 percent of board members overall were found to hold current roles in the fossil fuel industry, including through board memberships at major oil companies such as ExxonMobil, Total, and RWE. Among those with current ties are also individuals with roles at utility companies, such as Italy’s Enel or Eversource in the U.S., which generate their energy from fossil fuels including controversial and heavily emitting sources such as coal and fracked gas. 

Summary data for the insurers included in DeSmog’s investigationCredit: DeSmog

Responding to the findings, Elana Sulakshana, senior energy finance campaigner at the climate advocacy group Rainforest Action Network, said: “Insurance companies can play a crucial role in accelerating a transition to a clean energy economy, but it’s highly concerning that their boards are so entangled with fossil fuel interests.”

“Insurers cannot credibly claim to be climate leaders, while being governed by executives who have a personal stake in the continued expansion of coal, oil, and gas infrastructure,” said Sulakshana.

US insurance giant Liberty Mutual had the board with the most ties to the fossil fuel sector, with eight out of its 14 directors linked to major polluting energy companies. The insurer’s directors hold current board memberships at Koch Industries, Canadian Natural Resources Limited (CNRL), ExxonMobil, and utility company Eversource Energy which services Connecticut, Massachusetts, and New Hampshire, and has been targeted by campaigners for its support for the natural gas industry.

Liberty Mutual board member Annette Verschuren, for example, began her career in the Canadian coal industry and is now a director of the Canadian oil and gas company, Canadian Natural Resources Limited (CNRL), which extracts fuel from Canada’s highly polluting tar sands. Verschuren’s fellow director at Liberty Mutual, Joseph Hooley, has been director of the United States’ second largest oil company, ExxonMobil, since 2019. And three further members of the Liberty Mutual board are current trustees of Eversource Energy, while a fourth is the utility’s former CEO. 

At the end of 2019, Liberty Mutual announced restrictions on the type of support it provides to the coal industry. Currently, however, it has no restrictions on its support for…


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