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Leading Reinsurers Opt Out of UNEP’s Fresh Net-Zero Insurance Initiative

Leading Reinsurers Opt Out of UNEP’s Fresh Net-Zero Insurance Initiative

The UN Environment Programme has replaced the Net-Zero Insurance Alliance (NZIA) with the Forum for Insurance Transition to Net Zero (FIT), featuring increased involvement from regulators and antitrust lawyers. However, two major reinsurers that exited NZIA last year indicated they won’t join FIT.

SCOR stated it has no current plans to join FIT, and Munich Re is monitoring developments but isn’t considering a change. These companies left NZIA along with AXA, the initiative chair, after facing challenges from a coalition of US attorneys general.

Despite the departures, FIT has attracted 19 insurers and reinsurers, including most NZIA members and previously withdrawn firms like Beazley and IAG. Insurers from Suriname, Namibia, and Singapore are onboard, with more expected to join.

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FIT, chaired by Butch Bacani of the Principles for Sustainable Insurance, requires members to adhere to PSI’s principles but won’t mandate joint net-zero targets for underwriting portfolios. The group will focus on advancing net-zero insurance practices but is not part of the Glasgow Financial Alliance for Net Zero like NZIA.

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The FIT’s initial focus will be on four key workstreams. These include advancing frameworks for net-zero metrics and voluntary targets, developing transition plans for the insurance market, engaging with the real economy on transition strategies, and creating insurance solutions and taxonomies to support the transition.

Compared to the previous NZIA structure, the FIT incorporates more involvement from regulators and legal experts.

The FIT will receive guidance from a consultative group comprising insurance regulators and supervisors. This group includes representatives from regulatory bodies such as the UK Prudential Regulation Authority, Germany’s BaFin, and US states like California, Illinois, and Washington. Regulators from Ghana, Kenya, Costa Rica, and Brazil are also part of this advisory group, alongside Petra Hielkema, Chair of the European Insurance and Occupational Pensions Authority.

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