New underwriting targets supporting Swiss Re's journey to net zero

We have set near- and medium-term targets related to our ambition to reach net zero in underwriting by 2050. The goal of our targets is to increase the share of companies aligned to net zero by 2050 in our single risk re/insurance portfolios. The first set of targets is related to the re/insurance of fossil fuel companies, while the second one applies to companies in all other industries.

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Advancing the transition to net zero is one of the two ambitions of our Group Sustainability Strategy. Swiss Re has committed to achieving net-zero greenhouse gas (GHG) emissions in underwriting by 2050. This journey was initiated in 2018, mainly through our ESG Risk Framework that enables us to identify, assess and address environmental, social and human rights, and governance-related risks potentially associated with our transactions.

Phase-out of single-risk re/insurance1 for oil and gas producers not committed to align to net zero by 2050

The Oil and Gas Policy within the ESG Risk Framework included ambitions to increase the share of oil and gas premium income from companies that are aligned with net zero as per Science-Based Targets initiative (SBTi) validation or a comparable third-party assessment. One assumption when setting this ambition in March 2022, was that third-party guidance and assessment would be available soon. However, as of September 2023, there is still no available standard that can be applied to the oil and gas sector. Against this background, we have revised the ambitions into concrete and measurable targets for our single-risk property and general liability business:

  • By 2025, 50% of our gross written premiums from oil and gas producers2 is to come from companies committed to align to net zero by 20503; and
  • By 2030, 100% of our gross written premiums from oil and gas producers2 is to come from companies committed to align to net zero by 2050.3

Net-zero target covering re/insurance for listed companies in other industries

In addition, we have set ourselves a target for listed companies beyond the fossil fuel industry:

  • By 2030, 60% of gross written premiums from listed companies in our single-risk property, general liability, and commercial motor portfolios (excluding fossil fuels) is to come from corporates with science-based targets (SBTs)4 validated by a third party. The target scope includes listed companies (underlying risks in the case of reinsurance) with headquarters in OECD countries.

This target is based on a methodology proposed by SBTi called Portfolio Coverage Approach (PCA). In 2022, the transactions in scope of the target amounted to around 550 000 tonnes of insurance-associated emissions as of 2022 or 39% of Swiss Re's total insurance-associated emissions reported for 2022.

The new targets build on our existing actions in relation to our ambition to reach net zero in underwriting by 2050:

  • Since 2018, Swiss Re no longer provides single-risk re/insurance to businesses with more than 30% exposure to thermal coal utilities or mining.5
  • Since July 2021, Swiss Re no longer provides single-risk re/insurance covers to those oil and gas companies that produce the world’s 5% most carbon-intense oil and gas. In July 2023, this threshold was extended to 10%.
  • Since January 2023, Swiss Re no longer provides single-risk re/insurance covers for, nor directly invests in, new oil and gas field projects.6

Our targets reflect Swiss Re's ambition to continue to support clients on their own net-zero transition. We assist our corporate insurance clients and reinsurance clients in accelerating the transition to a low-carbon economy by de-risking transition projects and infrastructure, such as renewable energy, with dedicated teams. Furthermore, with the RDS Sustainability Compass and other analytic capabilities we support our clients in understanding their exposures to climate-related risks in their portfolios as an input into strategic decisions and to support regulatory disclosures. Our new targets for underwriting supplement the GHG reduction targets and ambitions in our investment activities and own operations.

These targets are based on our assessment of currently available information. This is a highly complex area and we will continue to assess our approach in light of developments. While we will make every effort to achieve our targets, the net zero-ambition also requires significant actions by consumers, businesses and governments, which are not within our control.

All targets for our underwriting activities in our journey to net zero by 2050 are listed in net-zero insurance targets. Related metrics for insurance can be found in Swiss Re's  Climate-related financial disclosures. This page also includes the GHG emissions associated with our single risk re/insurance portfolios as published in July 2023. For the financial year 2022, we estimate those emissions at 1.4 million tonnes of CO2e, based on the Global GHG Accounting & Reporting Standard Part C by the Partnership for Carbon Accounting Financials (PCAF).

Footnotes:

1Single-risk business refers to our direct and facultative re/insurance business, excluding facilities.

2Producers refers to companies with an annual oil and gas production of more than 10 million barrels of oil equivalent as per Rystad data. Transactions that cover activities unrelated to oil and gas, fore example, renewale energy, are out of scope.

3Definition of "committed to align to net zero by 2050”: have 2050 net zero targets (including Scope 3) AND near/medium-term reduction targets (including Scope 1, 2 and/or 3), with the adoption of both near- and long-term commitments viewed as demonstrating credibility. Swiss Re anticipates continuing to assess this definition in light of anticipated developments in available data and science-based guidance.

4Science-based targets (SBTs) define a clear emissions reduction pathway, in line with what the latest climate science deems necessary to limit global warming to 1.5°C above pre-industrial levels.

5For transactions in low- and middle-income countries that derive more than 70% of electricity from coal, existing power plants (ie, operational before 2018) can be covered until 2025, if there is evidence that the re/insured is implementing an effective GHG emissions reduction strategy (see Sustainability Report 2022, page 21).

6New oil and gas fields / reservoirs receiving final investment decisions after 2022 and that have not been producing before.

Disclaimer:
Although all the information discussed herein was taken from reliable sources, Swiss Re does not accept any responsibility for the accuracy or comprehensiveness of the information given or forward-looking statements made. The information provided and forward-looking statements made are for informational purposes only and in no way constitute or should be taken to reflect Swiss Reʼs position, in particular in relation to any ongoing or future dispute. In no event shall Swiss Re be liable for any financial or consequential loss or damage arising in connection with the use of this information and readers are cautioned not to place undue reliance on forward-looking statements. Swiss Re undertakes no obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. Further information can be found in the Terms of Use.