Zurich Insurance scraps cover for new oil exploration projects

FILE PHOTO: The logo of Zurich Insurance is seen at a former office building in Zurich, Switzerland November 11, 2021. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters) - Zurich Insurance Group will no longer underwrite new greenfield oil exploration projects, Europe’s fifth-largest insurer said on Thursday in an investor day presentation that sought to burnish its green credentials.

It also committed to a full phase-out of thermal coal from its underwriting portfolio by 2030 in wealthy countries and by 2040 in the rest of the world, unless companies seeking cover had formally approved science-based targets in place.

It vowed not to underwrite oil and gas drilling and production in the Arctic, although a spokesperson said in practice it already refrained from projects in such sensitive environments.

The pledges come after banks, insurers and investors with $130 trillion at their disposal vowed at the U.N.’s COP26 climate conference in Scotland this month to put combating climate change at the centre of their work.

Zurich also reiterated it was on track to deliver on its 2022 targets in the investor day presentation, stressing its strategy and business mix allow “superior” returns to shareholders and support its dividend policy.

It said last week it planned to raise its dividend and was confident of hitting its 2022 targets after property and casualty (P&C) premiums rose 11% on a like-for-like basis in the first nine months of 2021.

Presentation slides included comments from finance chief George Quinn that Zurich was on track to exceed its return on equity target of above 14% by fiscal year 2022.

Zurich, which aims to be a net-zero emissions business by 2050, is one of eight major insurance and reinsurance companies that in July launched an alliance to help speed up a transition to a cleaner economy.

It said in March it planned a 25% cut in carbon intensity for listed equity and corporate bond investments by 2025 and a 30% cut for direct real estate investments.

Reporting by Michael Shields in Switzerland and Carolyn Cohn in London; Editing by Riham Alkousaa and Mark Potter