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Major Insurance Giants Depart UN Net-Zero Alliance Amidst Rising US Political Opposition

As the future of the UN-convened Net-Zero Insurance Alliance hangs in the balance, Allianz, AXA, and SCOR announce their exit amidst mounting US political opposition.

Allianz building
Allianz building

The Departure of Key Members from Net-Zero Insurance Alliance

The UN-convened Net-Zero Insurance Alliance (NZIA) found itself on the precarious ground on Thursday following the departure of three prominent members: Allianz, AXA, and SCOR. The exodus has come amidst rising political opposition in the United States. Five of the original eight founding members of the NZIA, established in 2021, have now withdrawn. In an official statement, AXA explained its departure as a move to "continue its sustainability journey." AXA Group's Chief Risk Officer, Renaud Guidée, previously chaired the alliance.

NZIA and Its Mission Under Threat

The NZIA falls under the Glasgow Financial Alliance for Net Zero, initiated by UN climate envoy Mark Carney, with a key commitment from its members to slash their greenhouse gas emissions. However, the alliance has been increasingly met with opposition from some US Republicans, who believe it could infringe on antitrust laws.

Potential Antitrust Violations Stir Controversy

On May 23, the US state attorneys general warned NZIA members, suggesting that the group's goals and mandates might conflict with federal and state antitrust laws. They allowed insurers a month to respond to a letter delivered on May 15. The controversy has led to other insurance companies with substantial US business or exposure, including Swiss Re, Munich Re, Zurich Insurance, and Hannover Re, also withdrawing from the alliance.

Insurers Maintain Individual Climate Commitments

Allianz confirmed on Thursday via an emailed statement its decision to exit the NZIA while reiterating its commitment to achieving its individual climate goals. SCOR's new CEO announced the company's departure from the alliance at its annual general meeting, though no specific reason was provided.

Despite these challenges, legal experts have told Reuters that using antitrust laws to challenge companies collaborating on climate change initiatives through alliances may be a tough sell. Nevertheless, the escalating political backlash in the United States has made insurers especially vulnerable to such allegations. Lloyd's Chief Executive John Neal proposed that the alliance consider amending its membership rules to be less prescriptive or face potential dissolution.