Chubb Ltd: 1.5°C Aligned Targets for Underwriting, Insuring, and Investment

WHEREAS: In the United States, annual insured losses from extreme weather now routinely approach $100 billion, compared to $4.6 billion in 2000.[1] The Insurance Information Institute has noted that “catastrophe losses in the first half of 2023 were the highest in over two decades.”[2] Swiss Re reports that a 3.2 degree increase in global average temperature will result in an expected drop in GDP output of 18% by 2050.[3]

Shareholders are concerned that Chubb is not reducing the climate footprint of its insured, invested, and underwriting activities in alignment with global 1.5oC goals to help reduce growing climate risk. Chubb’s 2023 Q1 pre-tax catastrophe losses were $458 million, compared to $333 million last year.[4] Chubb’s Global Reinsurance segment moved from underwriting profits of $98 million in 2019 to $52 million in 2020 to underwriting losses of $69 million in 2021 and $24 million in 2022.[5]

Chubb is actively amplifying the problem by continuing to invest in, and underwrite, high greenhouse gas (GHG) emitting activities. Ceres reports that of the 16 largest U.S. property and casualty insurers, Chubb is the sixth largest investor in fossil fuel-fuel related assets, with $3 billion invested as of 2019.[6]

Chubb was also the fourth largest fossil fuel insurer globally in 2022, providing $550 to $850 million of fossil fuel related insurance.[7] Chubb is reported as providing coverage to the Freeport liquefied natural gas (LNG) terminal in Texas and Louisiana. LNG export facilities lock in decades of high carbon energy production, even while climate related catastrophes cause insurance premiums to skyrocket or insurance to become unavailable in growing areas of the US.[8]

Chubb has not given investors sufficient information on the magnitude and extent of its insured, invested, and underwriting emissions. Standards and methodologies exist to quantify and report such emissions. In 2022, the Partnership for Carbon Accounting Financials launched its Global GHG Accounting and Reporting Standard for Insurance Associated Emissions.[9]

Chubb is behind peers in reporting its emissions. Both Travelers[10] and AIG[11] have begun disclosing their financed emissions. European insurers including Swiss Re, Munich Re, Allianz, and Aviva have begun disclosing investment related emissions.[12] Swiss Re also discloses its insurance associated emissions.[13] Aviva this year plans to disclose and set 2030 targets for its insured emissions.[14]

BE IT RESOLVED: Shareholders request that Chubb issue a report, at reasonable cost and omitting proprietary information, disclosing the GHG emissions from its underwriting, insuring, and investment activities.

SUPPORTING STATEMENT: As necessary and at management discretion, Chubb can initially base reporting on reasonable emissions estimates and provide a timeline for disclosures.

[1] https://www.iii.org/table-archive/20922

[2] https://www.businesswire.com/news/home/20230803387647/en/Inflation-High-CAT-Losses-to-Lead-to-2023-Underwriting-Loss-for-PC-Industry-But-Recession-Likely-Avoided-This-Year-New-Triple-IMilliman-Report-Shows

[3] https://www.swissre.com/media/press-release/nr-20210422-economics-of-climate-change-risks.html

[4] https://www.insurancejournal.com/news/national/2023/04/26/717942.htm

[5] https://s201.q4cdn.com/471466897/files/doc_financials/2022/ar/2021-Chubb-Annual-Report.pdf p.59

[6] https://www.ceres.org/sites/default/files/reports/2023-08/Changing%20Climate%20for%20the%20Insurance%20Sector_%20Research%20and%20Insights.pdf p.21

[7] https://global.insure-our-future.com/wp-content/uploads/sites/2/2023/11/IOF-2023-Scorecard.pdf p.13

[8] https://lailluminator.com/2023/07/24/lng_insurance/

[9] https://carbonaccountingfinancials.com/en/newsitem/pcaf-launches-the-global-ghg-accounting-and-reporting-standard-for-insurance-associated-emissions

[10] https://sustainability.travelers.com/iw-documents/sustainability/Travelers_SustainabilityReport2022.pdf p.24

[11] https://www.aig.com/content/dam/aig/america-canada/us/documents/about-us/report/aig-esg-report_2022.pdf p.32

[12] https://www.swissre.com/dam/jcr:ec822a14-a4d7-4b6b-b0e2-49ae6036058c/2022-financial-report-doc-en.pdf#page=148 p. 175; https://www.munichre.com/content/dam/munichre/contentlounge/website-pieces/documents/MunichRe-Sustainability-Report_2022.pdf/_jcr_content/renditions/original./MunichRe-Sustainability-Report_2022.pdf p.37; https://www.allianz.co.uk/content/dam/onemarketing/azuk/allianzcouk/about-us/docs/pdfs/social-responsibility/Allianz_Group_Sustainability_Report_2021-web.pdf p.85; https://www.aviva.com/sustainability/reporting/climate-related-financial-disclosure/ p.67