Lloyd's of London must stop supporting fossil fuel expansion says NGO

By Virginia Furness

LONDON (Reuters) - The Lloyd's of London market is undermining climate action and should impose binding rules to prevent insurers supporting fossil fuel expansion, NGO Reclaim Finance said on Wednesday.

Some European insurers, including Generali and Zurich, have imposed restrictions on underwriting for fossil fuel projects in response to pressure from investors and campaigners.

But Reclaim Finance said Lloyd's of London was a laggard in that it left decisions on whether to underwrite activities in heavy-emitting sectors to its syndicate members.

Only five of Lloyd's 51 members, or managing agents, have policies restricting cover for new oil and gas fields, Reclaim Finance said.

"If the Lloyd's market wants to be taken seriously as a leading player in the transition, its managing agents need policies now," Ariel Le Bourdonnec, insurance campaigner at Reclaim Finance, said.  

A spokesperson for Lloyd's pointed to the group's transition roadmap, a three-year plan for supporting Lloyd's customers as they shift to lower carbon models and to help Lloyd's managing agents develop their sustainability strategies.

"Lloyd's will continue to follow government policy and regulatory requirements globally, while remaining committed to support an urgent and orderly just transition and remain agile in response to external shocks," the emailed statement said.

Lloyd's did not comment further on Reclaim Finance's report.

Lloyd's CEO John Neal told Reuters in an interview last week, before the NGO report was published, that Lloyd's did not plan to ask its members to tighten their oil and gas underwriting policies but would monitor managing agents' transition plans.

Neal said Lloyd's remains committed to its net zero goal and considered supporting two parallel energy systems was essential to a fair transition.

The Paris-based International Energy Agency has said there is no room for more oil and gas exploration if the goals of the Paris Agreement on cliamte change to keep global warming below 2 degrees Celsius (3.6 F) above pre-industrial levels are to be met.

(Reporting by Virginia Furness; editing by Barbara Lewis)