The company has also announced that it will not provide insurance coverage for oil and gas projects in government-protected conservation areas that do not permit sustainable use. The new standards have been developed in partnership with environmental stakeholders and experts.
Under the new guidelines, Chubb will only provide insurance coverage for clients who adopt evidence-based plans to manage methane emissions. These plans must include leak detection and repair programs and the elimination of non-emergency venting, as well as one or more measures that have been shown to reduce flaring emissions. The company will create a resource centre to support oil and gas insureds in identifying and adopting methane emissions reduction technologies.
New underwriting standards effective immediately, says Chubb
Effective immediately, Chubb will also refuse to underwrite oil and gas extraction projects in protected areas designated by state, provincial, or national governments. The policy applies to conservation areas covered by International Union for the Conservation of Nature management categories I-V in the World Database on Protected Areas, which includes nature reserves, wilderness areas, national parks and monuments, habitat or species management areas, and protected landscapes and seascapes. Chubb intends to develop and adopt standards for projects in category VI areas in the World Database of Protected Areas by the end of 2023, as well as for oil and gas extraction projects in the Arctic, Key Biodiversity Areas, mangrove forests, and global peatlands that are not currently listed in the World Database on Protected Areas.
Chubb’s commitment to clear guidelines that sustain biodiversity and protect nature is reflected in its new policy on not insuring energy projects in protected areas. The company’s new underwriting criteria, along with other significant actions, demonstrate its commitment to lead the industry in transitioning to a low-carbon economy while balancing the need for energy security.
Chubb has a track record of being at the forefront of sustainability in the insurance industry. The company was the first with significant U.S. operations to limit coal-related underwriting and investment, and later extended this policy to oil sands projects. In addition, Chubb Climate+, a new climate business unit, provides a full range of insurance products and services to businesses that support the transition to a low-carbon economy, as well as risk management and resiliency services to those managing the impact of climate change.
Speaking about the changes, Evan G. Greenberg, Chairman and CEO of Chubb, told press: “The methane-related underwriting criteria that Chubb has adopted – the first of their kind in our industry – are focused on the balance between the need to transition to a low-carbon economy and society’s need for energy security.”
“As a company, we are accelerating and expanding our climate-related initiatives without committing to sweeping net-zero pledges for which, in our judgment, there is not a viable path to achieve. We will continue to pursue in earnest a responsible, realistic and science-based approach. Implementing these underwriting criteria encourages oil and gas producers to adopt technologies to reduce GHG emissions in extraction. We know that many of our clients in the industry are already committed to limiting methane emissions and we will work to expand those commitments.”
He added: “Our policy on not insuring energy projects in protected areas also reflects our approach to setting clear guidelines to sustain biodiversity and protect nature,” continued Mr. Greenberg. “Taken together, our new underwriting criteria, along with our other substantive actions, are grounded in our commitment to lead the industry in the transition while balancing the need for energy security.”
