by The world is racing toward net zero. Governments push green policies. Consumers demand sustainability. Yet fossil fuels power much of daily life. Oil, gas, and coal extraction needs insurance to operate. Fossil fuel insurance keeps these industries alive. But as climate disasters mount, questions arise. Which insurance companies still underwrite them? And what’s the environmental impact of that choice? This 2025 update examines the landscape. We highlight laggards, spot trends, and explore why divestment matters. If you’re a policyholder or investor, this guide helps you decide where to place your trust.
The Role of Insurance in Fossil Fuel Projects
Insurance companies are gatekeepers. They cover risks from drilling rigs to pipelines. Without coverage, projects halt. Fossil fuel firms can’t borrow or build. This power shapes energy transitions.
Underwriting means providing policies for operations, liabilities, and disasters. It generates billions in premiums. But it also ties insurers to high-emission activities. Extraction and transport spill pollutants. Burning releases CO2. These fuel global warming.
Climate costs hit back. Insurers pay for wildfires, floods, and storms. In 2024, U.S. losses topped $150 billion. Many blame fossil fuels. Yet some insurance companies keep the cycle going. For deeper insights, explore our post on climate risk insurance.
Environmental Impact of Fossil Fuel Insurance
Support for fossil fuels has clear consequences. Extraction harms ecosystems. Oil spills kill marine life. Coal mining strips land. Gas fracking contaminates water. These activities drive 75% of greenhouse gases.
Insurance companies enable this. By covering risks, they lower costs for polluters. Projects become viable. Emissions rise. A Yale Climate Connections report notes insurers hold $500 billion in fossil assets. This exposure worsens weather extremes they insure against.
Communities suffer most. Low-income areas near sites face health risks. Indigenous lands often bear the brunt. Global warming displaces millions. Insurers face backlash. They hike premiums or drop coverage in vulnerable spots. It’s a vicious loop. For stats, see Yale’s analysis on insurance’s fossil fuel bite.
Global Trends in Fossil Fuel Divestment
Progress varies by region. Europe leads. Firms like Allianz and AXA restrict coal and oil sands. By 2025, 18 insurers pledged oil and gas limits. Australia follows suit.
Reinsurers—backing primary insurers—shift too. Market share with coal exclusions hit 62%. Coal projects struggle for coverage. Rates spike 40%. This pressures primaries.
Asia lags. Chinese giants like PICC cover domestic coal. Japan’s Tokio Marine insures gas expansion. But activism grows. Campaigns like Insure Our Future push for 1.5°C alignment.
Insurance Companies Still Covering Fossil Fuels
Not all pull back. U.S. firms dominate ongoing support. They underwrite $5.2 billion yearly. Top players include:
Berkshire Hathaway
Warren Buffett’s empire leads. It holds $200 billion in fossil investments. Underwriting covers pipelines and refineries. No coal exit policy. Critics call it a climate enabler.
State Farm
America’s largest auto insurer invests heavily. $22.4 billion in oil and gas. It writes policies for drilling ops. Despite California wildfire losses, it expands fossil ties.
AIG
Global giant, U.S.-rooted. Insures offshore rigs and LNG terminals. No full divestment. It limits tar sands but continues oil expansion. Earns millions from these lines.
Liberty Mutual
Boston-based, it has coal restrictions. But oil and gas? Full steam. Covers Trans Mountain pipeline. Faces protests from Indigenous groups.
Chubb
Swiss-U.S. hybrid. Proactive on coal, but underwrites Arctic drilling. Brazil offshore projects too. Its policy lags European peers.
Others: Starr, Everest Re, Axis Capital. They lack broad exclusions. Focus on profits over planet. Data from Insure Our Future ranks them low.
Companies Scaling Back or Divesting
Some act. Generali stopped new oil/gas midstream in 2024. Swiss Re limits tar sands. Munich Re phases coal.
U.S. examples: Hartford scales back. But full exits rare. By March 2025, some pledge phase-outs for non-1.5°C clients. Pressure mounts from lawsuits and boycotts.
Reinsurers like Hannover Re restrict upstream. This ripples to primaries. Coal’s uninsurable outside China.
Comparison: Top Fossil Fuel Insurers vs. Leaders
| Company | Underwriting Stance | Fossil Exposure ($B) | Divestment Progress |
|---|---|---|---|
| Berkshire Hathaway | Full coverage | 200 | None |
| State Farm | Active oil/gas | 22.4 | Limited |
| AIG | Ongoing expansion | High | Partial |
| Allianz (Europe) | Restrictions | Declining | Advanced |
| AXA (Europe) | Oil/gas limits | Low | Strong |
Source: Compiled from Insure Our Future and Ceres reports.
Regulatory and Activist Pressure
Laws catch up. California’s CDI eyes disclosures. Failed 2023 bill sought fossil underwriting transparency. States like NY push suits against polluters.
Activists amplify. Rainforest Action Network targets Chubb. 60 U.S. firms urged divestment in 2020. Patagonia, Ben & Jerry’s lead calls.
Global: EU mandates climate risk reporting. UN presses for net zero underwriting. By 2025, more follow.
Consumers vote too. Switch providers. Fossil Free Funds rates insurers. Check before buying.
What This Means for Consumers and Investors
Policyholders face irony. Your premium funds fossil coverage. Then pays for climate damages. Switch to green insurers. They offer competitive rates, lower risks.
Investors: Fossil ties strand assets. Divested funds perform neutral or better. BlackRock notes no negative hits.
Businesses: Align with ESG. Drop laggard partners. For green options, see sustainable business insurance.
The Path Forward: Toward Net Zero Underwriting
Insurers must act. Adopt 1.5°C policies. Phase fossil by 2025. Invest in renewables. Tools like wearables cut risks.
Success stories: AXA’s coal exit saved on liabilities. More follow. By 2030, fossil uninsurable.
Stakeholders unite. Regulators enforce. Activists protest. Consumers boycott. Change accelerates.
Conclusion: Choose Insurers Aligning with the Future
Fossil fuel insurance persists, but cracks show. U.S. giants like Berkshire and State Farm lead coverage. Their environmental impact weighs heavy—funding emissions while insuring disasters. Europe divests faster. Pressure builds everywhere.
As a consumer, research. Support leaders. Demand transparency. The industry holds the key. Unlock a cleaner world. What’s your insurer’s stance? Share below.
