Insurance Industry Lose Interest In Climate Hype: ‘Zurich Insurance Group is closing its U.S. climate change office six years after opening it’
Insurance Industry Lose Interest In Climate Hype
Zurich Insurance Group is closing its U.S. climate change office six years after opening it to help persuade companies to press public officials for solutions to climbing disaster losses, according to several sources.
The move seems likely to end a high-profile advocacy effort that exposed federal lawmakers to the financial concerns of a major insurer regarding rising temperatures. Some observers also say the closure stands to lessen an industry voice that might resonate with Republicans in a debate that’s often characterized as driven by Democratic ideology.
Zurich’s decision comes amid a flush of visibility for the office and its director, Lindene Patton, who in recent months helped write the National Climate Assessment, testified before a Senate panel and spoke at the White House.
In some circles, that has distinguished Patton as an unusually credible advocate for climate action who speaks from the suit-and-trouser world of the financial sector, where crunching numbers outpaces environmental ideology. One observer described her as a “dynamo.”
But behind the forceful public presence is a choppier business environment for Zurich, sources say. Patton and her small team of employees were also tasked with creating new types of insurance policies that would be used by climate-concerned customers, ranging from hybrid car owners to utilities that store carbon dioxide underground. Zurich may have seen those products as not popular enough to justify a standalone climate office, some observers say. The products will instead be folded into the company’s traditional lines of business.
The move has gained greater attention for its potential reverberations on climate policy. While many observers believe that the insurance industry could help depoliticize the climate debate, there’s little evidence it’s willing to do that. And it appears there may be less now.
Some observers described Zurich as perhaps the only company that had both a household brand in the United States and a willingness to talk openly about the risks of climate change. (Farmers Insurance Co. is a subsidiary.) That has placed Zurich at the top among insurers who portray rising temperatures as a business threat that could harm the economy, as opposed to an environmental, and often partisan, peril, advocates say.
When Zurich announced its “climate initiative” six years ago, it was an effort, in part, to rally other members of the massive industry to get involved in shaping public policy. It warned of worsening climate risks that foretold of more than just sharpening damage from floods and storms: The industry also faces increased pressure from regulators and, in the eyes of customers, reputational risk if it doesn’t act, the company said.
In a white paper from that period, it noted that only “a fraction” of insurers were taking the threat seriously, adding that the industry is “still a long way from meeting the enormity of the challenge.”