16 September 2026
About the research
The team assessed five major (re)insurance companies to support Baillie Gifford in deciding which firms to include in its Climate Future Fund.
The challenge
Climate change is not only an environmental problem. For insurers, it is a direct threat to their business model. When an insurer covers a high-emitting energy company, that company's carbon output contributes to the floods, wildfires, and storms that the same insurer must eventually pay out on elsewhere in its portfolio. Global insured losses exceeded US$108 billion in 2025, the sixth year in a row above that threshold (Munich Re, 2026). The sector is, in a very real sense, paying for its own reluctance to act.
Data and method
The research team built a scoring framework, rated 0 to 5, to assess five companies: Allianz, Swiss Re, Munich Re, AIA, and Ryan Specialty. The framework had three categories:
- What is insured (40%): emissions disclosure, fossil fuel phase-out plans, and net-zero targets
- What is incentivised (40%): internal climate risk management, client engagement, green technology support, and adaptation products such as parametric insurance
- What data is published (20%): quality of ESG reporting and public engagement
A score below 3/5 was set as the threshold for exclusion from the fund. Scoring drew from public corporate disclosures, aligned with TCFD standards and IPCC climate science.
Key findings
Finding 1: The financial case for action is strong
The sector's exposure to climate risk is not abstract. Because large (re)insurers cover almost every industry and geography at once, a warming planet produces losses across their entire portfolios at the same time. Traditional hedging does not work when the risk is global and affects everyone simultaneously. Acting on climate change is therefore a matter of financial self-preservation, not ethics.
Finding 2: The tools exist
Insurers can raise the cost of capital for fossil fuel projects by withdrawing coverage, help make renewable energy infrastructure bankable for lenders, and reward clients who invest in flood defences with lower premiums. The renewable energy insurance market grew from $5.65 billion to $8 billion between 2020 and 2024 (Insure Our Future, 2025). These tools exist and work, but many adaptation products remain in pilot stages rather than being scaled into core business lines.
Finding 3: Allianz leads, but disclosure is a sector-wide problem
Allianz scored 4.2/5, the highest of the five firms assessed. It has brought parametric insurance into its core operations, links executive pay to ESG targets, and has grown its renewable energy coverage revenue by 25% since 2022 (Allianz, 2025). Swiss Re (3.9) and Munich Re (3.7) also cleared the investability threshold, with strong commitments to phasing out fossil fuel coverage. AIA (3.3) passed but lacks adaptation products. Ryan Specialty scored 1.1/5, reflecting an almost total absence of climate-related data and strategy.
Finding 4: US market exposure is a hidden vulnerability
A recurring weakness across the sector is heavy revenue dependence on the United States, which scores just 21.8 on the Climate Change Performance Index (CCPI, 2026). Swiss Re draws 40% of its revenue from the US market and Munich Re 29% (Swiss Re, 2025 & Munich Re, 2025). This creates a clear gap between the internal climate commitments these firms publish and the regulatory environment where a large share of their business operates.
Bottom line
The (re)insurance sector has both the financial incentive and the practical tools to drive the global shift toward a low-carbon economy, but progress is uneven and the gap between leaders and laggards is wide. Investors building climate-focused portfolios need to look beyond headline net-zero pledges and examine what firms are underwriting, incentivising, and disclosing.
Implications for decision makers
For investors: A company without clear emissions disclosure and a time-bound fossil fuel phase-out strategy carries real financial risk. The absence of data, as seen with Ryan Specialty, is itself a warning sign.
For insurers: Parametric insurance and adaptation-linked premium discounts are no longer niche products. Firms that scale these offerings will be better placed for a world where physical climate risk keeps growing.
For policymakers: Standardised Scope 3 Category 15 reporting, covering insurance-associated emissions, would close the single biggest information gap in assessing how the sector is managing its climate exposure.
References
Allianz, 2025. Annual Report 2024
CCPI, 2026. Climate Change Performance Index
Insure Our Future, 2025. Renewables Gallop As Fossil Fuels Stall— Opportunities and Risks in the Energy Transition.
Munich Re, 2025. Group Annual Report 2024 (Annual Report). Munich.
Munich Re, 2026. Natural disasters in 2025: Devastating wildfires and intense thunderstorms exacerbate losses for insurer.
Swiss Re Group, 2025. Swiss Re Annual Report 2024