SBTi Publishes Insurance Underwriting Brief as First Step Toward Net-Zero Standard

The Science Based Targets initiative released an Insurance Underwriting Industry Brief outlining approaches and methods for insurance companies to set science-based targets covering their underwriting portfolios. The brief is the first step toward developing a Financial Institutions Net-Zero Insurance Standard.

Re/insurers globally hold approximately $6.8 trillion in premium volume and more than $35 trillion in assets under management, positioning them as influential actors in the transition to a net-zero economy. The SBTi's Insurance Underwriting Industry Brief provides background on different approaches and potential target-setting methods applicable to decarbonising underwriting portfolios, rather than investment and lending activities for which the SBTi developed metrics in 2020. It outlines core principles, starting points and next steps for standard development.

Insurance underwriters occupy a distinct role in the financial system as risk managers, risk carriers and institutional investors, giving them multiple levers to influence GHG emissions across the economy. By setting science-based targets across their underwriting activities, insurers could restrict coverage for the highest-emitting activities, increasing the cost of capital for carbon-intensive industries. For India's growing insurance sector, which is subject to IRDAI's evolving ESG guidelines, the prospect of an internationally aligned standard offers a potential framework for climate-related commitments.

The brief feeds into the SBTi's broader Financial Institutions Net-Zero Standard, which was being developed in parallel with the near-term criteria revision for banks and investment managers. The initiative indicated the Insurance Standard's development would be coordinated with its existing FI framework to ensure consistency. Stakeholders were invited to monitor SBTi's LinkedIn and newsletter channels for updates on the consultation and development phases of the forthcoming standard.

Key figure — $35 trillion in global assets under management held by re/insurers