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Lloyd’s of London boss calls for UN climate alliance rules rethink

Posted On: May. 24, 2023 1:28 PM CST

John Neal

(Reuters) — A global climate alliance for insurers needs to make its membership rules less prescriptive or risk falling apart, the boss of Lloyd’s of London said after political pressure from some U.S. states prompted some companies to leave.

The United Nations Environment Program on Wednesday said “recent discussions within the United States” had been behind four insurance firms quitting the U.N.-convened Net-Zero Insurance Alliance in recent months.

In response, Lloyd’s CEO John Neal told Reuters the exits should lead to a rethink about what it means to be a member of the group.

“There are five objectives, and you have 12 months to meet one of them and 36 months to meet three of them. NZIA need to have another look at what their objectives are or the alliance will fall apart.”

Mr. Neal added that Lloyd’s complied with NZIA’s requirements and had no plans to exit. “We don't need to precipitate this,” he said.

Signatories to NZIA, part of the Glasgow Financial Alliance for Net-Zero set up by U.N. climate envoy Mark Carney, will hold a call on Thursday to discuss the situation in the United States and NZIA’s options including whether “to carry on or wind it up,” a source familiar with the matter said.

That call will be followed by a meeting of the group’s steering committee, which is chaired by Renaud Guidée, Axa’s group chief risk officer, the source said, speaking on condition of anonymity because of the sensitivity of the matter.

A spokesperson for NZIA did not immediately respond to a request for comment.

Reinsurer Swiss Re on Monday joined Munich Re, Zurich Insurance and Hannover Re in exiting NZIA. All four have significant U.S. businesses.

This month, 23 U.S. state Attorneys General told NZIA members that the group’s targets and requirements appeared to violate both federal and state antitrust laws. They gave insurers a month to respond in a May 15 letter seen by Reuters.

They also accused insurers of collaborative action “to advance an activist climate agenda” which was having “serious detrimental effects” on the residents of their states.