Six marine insurers have launched an initiative to provide transparency on carbon emissions and support the shipping industry’s green transition.
The six marine insurers, Swiss Re, Gard, Hellenic Hull Management, SCOR, Victor International, and Norwegian Hull Club, have established a framework that will help them engage with the shipping industry and support net-zero insurance.
As explained, the Poseidon Principles for Marine Insurance framework will quantitively assess and disclose the climate alignment of marine insurers’ underwriting portfolios.
This pioneering initiative makes marine insurance the first line of business to establish a sector-specific methodology to support the ambition of the Net-Zero Insurance Alliance (NZIA), where members commit to transitioning their underwriting portfolios to net-zero GHG emissions by 2050, consistent with a maximum temperature rise of 1.5°C above pre-industrial levels by 2100, in order to contribute to the implementation of the COP21 Paris Agreement.
“The transition to net zero is a massive endeavor and we appreciate the efforts of the marine industry. As risk managers, insurers and investors, the insurance industry has a key role in supporting the transition to a net-zero economy,” Patrizia Kern, Marine Head at Swiss Re Corporate Solutions and Chair of the drafting committee for the Poseidon Principles for Marine Insurance, commented.
“The Poseidon Principles will serve our institutions as well as our clients to quantitatively assess and disclose the climate alignment of their underwriting portfolios and thus improve decision-making at a strategic level and shape a sustainable future for all. The disclosure framework provided by the Poseidon Principles will enable us to credibly report our progress towards net-zero insurance using granular marine data.”
“As signatories of the Net-Zero Insurance Alliance, NZIA, we at Swiss Re encourage everyone in the marine industry to align with net-zero 2050 targets,” Kern added.
Signatories to the Poseidon Principles for Marine Insurance commit to assessing and disclosing the climate alignment of their hull and machinery portfolios, and to benchmark them against two trajectories: one linked to a 50% reduction of annual CO2 emissions by 2050 compared to 2008 – in line with the International Maritime Organization’s Initial GHG Strategy; and one linked to a 100% reduction of emissions by 2050.
Furthermore, a third trajectory will be introduced to align the full decarbonization trajectory with zero-lifecycle GHG emissions in order to meet the ambition of net-zero commitments such as the NZIA and to support a zero-emissions future for shipping.
“We need to work together to tackle the challenge of climate change. As such, the Poseidon Principles for Marine Insurance are an important contribution from the marine hull insurance industry. The principles provide us with a common tool to monitor progress over time,” Rolf Thore Roppestad, Chief Executive Officer of Gard, and Vice-Chair of the drafting committee said.
“We will work together with our Members and clients to make sure that the principles and the methodologies applied are as practical and straightforward as possible. Our common goal is an accelerated move towards a decarbonized industry.”
Brokers, clubs, and other key stakeholders in marine insurance commit to supporting the Principles as affiliate members and align with the goal of decarbonizing international shipping by 2050.
Next to the six aforementioned founding signatories, additional marine insurers are expected to join in the near future.
Affiliate members supporting the principles are Willis Towers Watson, Cefor, and EF Marine.
The Poseidon Principles for Marine Insurance are founded on the methodology used in the Poseidon Principles for Financial Institutions and were developed in an effort spearheaded by leading marine insurers and industry stakeholders with expert support provided by the Global Maritime Forum, Swiss Re Institute, and UMAS. The International Union of Marine Insurers (IUMI) is a supporting partner.
Source: Offshore Energy