Insurance companies are showing “modest” improvement in disclosing climate risk management practices, but there is still plenty of room for growth in addressing climate risks and opportunities, according to a new report. 

Boston-based investor coalition Ceres said on Thursday that 22 insurers, or 16% of a total of 148 insurers, earned its high-quality rating for their disclosure practices, more than double the nine insurers that earned the top rating in the organization’s 2014 report. 

The overall improvement is “certainly promising” and can be attributed to factors such as the Paris climate agreement reached in December 2015 and the efforts of the Obama administration to rein in greenhouse gas emissions via regulations such as the Clean Power Plan, said Max Messervy, Ceres’ insurance program manager. 

“Climate change/sustainability issues are becoming increasingly mainstream, particularly amongst the business community,” he said. 

Overall, 16 of the 64 property/casualty insurers, or 25%, evaluated by Ceres earned a high-quality rating and 27% earned the second-highest medium-quality rating. The property/casualty insurers earning the high-quality rating in the biannual Ceres report were: the former Ace Ltd., Allianz S.E., American International Group Inc., Axa S.A., Chubb Ltd., FM Global, Hartford Financial Services Group Inc., Liberty Mutual Holding Co. Inc., Munich Reinsurance Co., Nationwide Mutual Insurance Co., Swiss Re Ltd., Tokio Marine Holdings Inc., Travelers Cos. Inc., W.R. Berkley Corp., XL Insurance America Inc. and the U.S. division of Zurich North America.

“While the majority of P&C insurers’ disclosures are of at least moderate quality, there is still significant room for improvement,” the report stated. 

Climate risk governance is one of the key areas Ceres evaluates these insurers on, particularly whether senior management and boards of directors are regularly and systematically engaged in addressing climate risk, including whether claims data is being examined for potential climate impacts or whether their catastrophe modeling factors in the latest scientific findings, Mr. Messervy said. Allianz and Swiss Re were specifically highlighted in the report for regularly engaging their boards of directors on climate issues. 

“Insurers that tended to do well are also thinking holistically about the way they’re approaching their investments,” he said. “Are they increasing their investments in clean energy-related assets? Are (their) real estate assets at particular risk from natural disasters that may be exacerbated by climate change impact?”

The Ceres report showed that 13 U.S.-based insurers earned a high-quality rating, a marked increase from just two U.S. insurers earning the top rating in the 2014 report, but Ceres would like to see more leadership from domestic insurers in terms of their public policy engagement on climate issues, Mr. Messervy said.

“We’ve seen increasing engagement from the business community … but we’ve seen a relative silence from U.S. insurers,” he said. “European insurers tend to be more engaged on these topics.”

The property/casualty insurers featured in the Ceres report wrote at least $1 billion in direct premiums annually.