"In a vicious cycle, the sector’s financing of oil and gas is having an impact on its bottom line."
"Within just a week, the sheer devastation of the Los Angeles wildfires has pushed to the fore fundamental questions about the impact of the climate crisis that have been largely avoided by lawmakers, influencers and the public.
Among them: What is the future of insurance when people’s homes are increasingly located in areas of climate risk — whether wildfires, hurricanes, flooding or the rising sea levels?
Those questions have bedeviled policy makers in California — where insurance giants like State Farm, Farmers and Allstate announced last year that they were no longer writing new policies in the state due to the surge in wildfires (in 2024 alone, firefighters across the state battled 8,024 wildfires that burned more than 1 million acres and destroyed 2,148 houses and other structures).
Insurers have long been aware of the risk of climate change — rising premiums, increasing losses. In 1973, the German insurance firm Munich Re published a brochure on flooding that it claims was the first use of the term “climate change” in the industry, warning of the growing risk of rising temperatures and increased carbon dioxide in the air. Some 40 years later, the CEO of French insurance giant AXA said it would be impossible to insure a world that is 4 degrees Celsius (7.2 Fahrenheit) warmer.
Nonetheless, insurance companies have become some of the biggest financiers of fossil fuels, which are the primary cause of climate change — the extraction and burning of oil, gas and coal are responsible for over 75% of greenhouse gas emissions and nearly 90% of carbon dioxide emissions."
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