By Simon Jessop

LONDON, (Reuters) – Swiss Re (OTC), second largest reinsurer in the world, announced it will increase oil and gas producers it does not cover. This is following increasing pressure from big businesses to support the fight against global warming.

Swiss Re announced in its annual sustainability report that it will no longer offer individual insurance for oil and gas companies involved with the most carbon-intensive 10% production.

It had eliminated 5% the most polluting oil companies in 2021 based on carbon intensity. This is a measurement of how many emissions per barrel or unit of production.

While 90% are not covered by this change, it is still a sign from Peter Bosshard – global coordinator at NGO Insure Our Future.

He said that “Oil- and gas operations must be phased down in accordance to climate science” or they might become uninsurable before the end the decade.

Swiss Re, along with others in this sector, have increased their rigour following a string of reports that highlighted the urgent need to change.

The International Energy Agency reported last year that no new oil or gas fields need to be created if the goal of limiting planetary warming to 1.5 degrees Celsius (2.7 Fahrenheit above pre-industrial levels) by the mid-century was met.

Swiss Re, in accordance with the IEA’s report, stated it wouldn’t continue to provide coverage for projects that are approved by their parent company after 2022 unless the company can demonstrate a scientifically-based plan to reduce emissions.

Swiss Re stated that it would like half its oil and gas premiums by 2025 to be from companies who align with the net zero by 2050 plan. By 2030, all clients should do so.

Additionally, it stated that the company will not continue to provide insurance for companies and projects producing more than 10% in Arctic regions, in addition to Norwegian producers.

Swiss Re stated that it expects to conclude a policy in the oil and natural gas sector by 2023 on the subject of facultative insurance, which insures bundles risk within a job lot.