German insurer Munich Re said on Friday it was withdrawing from an industry-wide alliance of insurers focused on reducing carbon emissions, a blow to the group from a prominent founding member.
Munich Re, the world’s largest reinsurer, pledged to stick to its own climate targets but said it would exit the Net-Zero Insurance Alliance to avoid antitrust risks.
Antitrust concerns are at the center of a growing sustainability backlash in the United States, as Republican politicians push back on group efforts linked to climate and other so-called ESG issues.
There are no known cases of a company targeted by an antitrust lawsuit over its policies, but that actions by some Republican politicians in the United States have made many financial firms wary of that risk.
The world’s second-largest fund manager Vanguard in December pulled out of a similar alliance for the industry.
“It is more effective to pursue our climate ambition to reduce global warming individually,” said Joachim Wenning, CEO of Munich Re.
The UN-convened alliance’s website says it is a group of 30 insurers and reinsurers, including Allianz and Axa, which collectively represent about 15% of world insurance premium volume globally.
Munich Re was a founding member of the alliance, which was established in 2021.
Neither the alliance nor the current chair immediately responded to requests for comment.
Munich Re is ranked among the top 10 of some 30 insurers in a scorecard by Insure our Future, which tracks the climate ambitions of major insurers.
“There are different opinions within the legal community about whether antitrust law indeed rules out collective climate action,” said Peter Bosshard, coordinator of the Insure our Future campaign.
It remains an open question whether other insurers follow suit.
“If the more progressive are ones are getting out, I would think it might be quite a threat to the alliance,” said Regine Richter of the activist Urgewald.
Insurers have been under pressure to limit doing business with dirty industries.
A group of climate activists last week sent a letter to 30 insurance company CEOs, asking them to “immediately” stop underwriting new fossil fuel projects in the wake of a stark climate warning from U.N. scientists.
Recipients included Munich Re, Zurich Insurance and AXA.
Companies in Europe belonging to climate alliances and keen to increase co-operation have been concerned about breaching anti-competition laws in the process, prompting some regulators to explain how they will ease the rules.
Britain’s Competition and Markets Authority last month published draft guidance on how competition law applies to sustainability agreements between firms. It said the guidance should give firms greater certainty about when agreements “that genuinely contribute to addressing climate change will be exempt from competition law.”