Chinese insurers are leading in global renewables underwriting, with the top three capturing US$200 million in new premiums between 2023 and 2024, according to Insure Our Future, a network of environmental non-governmental organisations (NGOs).
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Its analysis of the 45 top energy insurers found that PICC, Ping An and Yingda Taihe grew their renewable underwriting business by more than 20 per cent – a rate that only a few of their global peers, such as AXA and AXIS Capital, matched.
“Chinese insurers are building deep expertise in understanding modern renewable project risks and returns, reflecting China’s impressive buildout,” said Muyi Yang, senior energy analyst for Asia at non-profit think tank Ember Energy.
“There’s also tremendous opportunity for international collaboration – combining Chinese scale, speed, and experience with the power of global risk-sharing, standards, and capital markets… to triple installed renewables capacity by 2030 worldwide.”
By contrast, Europe’s three biggest underwriters – Allianz, AXA and Zurich – collectively added just US$141 million in new renewable premiums over the same period.
In North America, Bermuda-based AEGIS and Canada’s Fairfax were among the top 10 renewable underwriters last year, with US$41 million and US$38 million gains in new premiums, respectively. However, no major United States insurer increased renewable coverage by over US$25 million in 2024.
Fossil fuel dependence persists
Despite the global renewable insurance market growing 9 per cent annually since 2020, insurers continue to be heavily exposed to fossil fuels. The fossil fuel insurance market – even while declining about 2 per cent a year over the same period – is still more than three times that of its renewable counterpart.
While PICC had the highest total renewable premiums at roughly US$485 million, for instance, it underwrote nearly three times as much in coal, oil and gas projects, making it the world’s second largest insurer of fossil fuels. AEGIS remains the single largest fossil fuel underwriter globally.
To get on track to meet the International Energy Authority (IEA)’s 2030 net zero benchmark, the industry will need to at least double its pace of renewables underwriting growth while diverting coverage from liquified natural gas (LNG), the report’s authors said.
Oil and gas majors have persisted in betting big on the fossil fuel, with Shell’s latest LNG outlook revealing that it expects Asia’s economic growth to drive the bulk of the rise in LNG demand till 2040.
But such underlying demand growth assumptions look “increasingly fragile,” said the Institute for Energy Economics and Financial Analysis (IEEFA), an energy think tank. The oil giant, IEEFA wrote in a recent analysis, has been forced to abandon previous claims about LNG displacing coal in Asia and is now “grasping at straws” by arguing that data centres and artificial intelligence to “validate its long-term LNG gamble” without supporting evidence.
Citing data from Global Energy Monitor, Insure Our Future added that LNG demand faces structural challenges, with over half of the proposed import terminal capacity in Asia – the supposed growth engine for LNG – having been cancelled over the past decade. Developers of mega-scale terminals in South Korea and the Philippines have cited rising costs, lower than anticipated LNG demand and weather-related challenges for the cancellations.
Apart from Italy’s Generali, no other major insurer has adopted policies to curb LNG expansion, raising concerns of locking in climate risk for decades to come.
“If we are serious about managing the catastrophic risks of fossil-fueled extreme weather, the renewable underwriting market must expand at least 18 per cent annually through 2030,” said Risalat Khan, senior strategist at Insure Our Future.
“The good news is that several insurers are proving this is possible, but companies… need to divert risky new LNG coverage and seize renewable growth opportunities.”
