Beyond Banks: Uncovering the Role of Insurance Companies in Fueling the Climate Crisis

Since its founding in 2021, the team at Bank.Green has focused on highlighting the role that banks and other lending institutions play in fueling the fossil fuel crisis while providing people with sustainable alternatives.

However, the role of insurance companies in accelerating the climate crisis should not be overlooked. Today, we are announcing an expansion of our evaluation activities to include the insurance sector.

When you buy an insurance policy, such as car insurance, it usually covers a 12-month period. Now, imagine you're a great driver who never has an accident and never needs to file a claim. Have you ever wondered what happens to all the premiums you’ve paid over the years?

Insurance companies invest them. In fact, insurance companies are some of the largest investors in the economy. In 2023, US insurer Allstate derived 6% of its income from investment activities, while UK insurer Aviva earned more in investment returns than from insurance premiums!

At the end of 2022 (the latest available data), Allstate had $2.9 billion invested in oil and gas. That same year, Allstate stopped issuing new homeowner insurance policies in California, a state increasingly impacted by wildfires linked to climate change.

This reveals the hypocrisy demonstrated by many large insurance companies. Their investment arms continue to give a lifeline to the fossil fuel companies. Meanwhile, their underwriting divisions deny coverage to households impacted by climate change, facilitated by the insurance company's investments. In some ways, the insurance industry has hedged its bets. When oil prices are high, losses from underwriting are well compensated by the windfall returns from investments in fossil fuel companies.

This lack of transparency is also revealing. Neither Prudential nor MetLife, two of the largest insurance companies in the US, disclosed in a commonly used investor screening questionnaire how much of their total investments are tied to the fossil fuel sector—an omission that speaks volumes.

We are launching a new section of our website to highlight the good, the bad, and the ugly of the insurance sector. And we will be demanding more transparency and empowering you to hold these companies accountable. Stay tuned for further announcements!