Aviva chief executive Amanda Blanc has warned that the insurance industry cannot “speak with forked tongue” on global warming by doing one thing with its investment portfolios and another with the products it sells.
More insurers are promising to focus their often vast investment portfolios on those companies committed to cutting carbon emissions in line with the Paris climate agreement. But in an interview with the Financial Times, Blanc said the industry’s efforts to curb global warming also needed to be reflected in how it sold insurance.
“The underwriting needs to catch up with the investments,” she said. “We need to be having conversations with corporates around our ability to underwrite something which is no longer sustainable.
“We can’t be saying we want to take the premium but we’re not going to invest in these organisations. That would just be incoherent”, said Blanc, who has run Aviva since last July.
The warning came as Aviva pledged not to sell insurance to companies which make more than 5 per cent of their revenue from coal or other heavily-polluting fuels such as oil sands, unless they have signed up to climate targets.
The promise was part of a wider set of climate commitments announced by the UK insurer. Aviva said it would be a net zero carbon emissions company by 2040, a decade earlier than many other financial services companies have promised.
The plan includes cutting carbon emissions from its own operations and supply chain by 2030, and from its investment portfolio by 2040.
“We’re really stretching ourselves here,” said Blanc. “This is the most demanding target set by any major insurer in the world . . . this will be the biggest challenge we’ve probably ever faced as a business.”
Aviva has already indicated that it is prepared to take a tough line as an investor. Last month it warned it would sell its stakes in 30 of the world’s largest oil, gas, mining and utilities companies unless they do more to tackle climate change. It has given them two years to sign up to a transition plan.
Mark Versey, chief executive of Aviva’s investment business, said that the reaction from the companies had been “generally very positive”.
“They are all thinking about this but it is not easy for them and we understand that. We are here to help them as much as we can,” he said. “If all the companies we invest in sign up to net zero by 2040, then a lot of our work will be done by then,” Versey added.
Some of Europe’s largest insurers, such as Axa, Allianz and Zurich, have already promised to stop selling cover to some heavily-polluting companies, such as coal miners and coal-fired power stations. But the trend has been slow to spread around the world.
Blanc said that the industry’s efforts to protect the environment needed to move beyond the realm of commercial insurance.
“We need to make it attractive for people to buy electric vehicles from an insurance perspective,” she said. “As we’re building up our experience of electric vehicles . . . we’ll become more sophisticated in the way we are able to price [cover].”