Climate activist group Insure our Future has published a report criticizing several global insurers, including Chubb Ltd., Mapfre SA and Tokio Marine Holdings Inc., for underwriting offshore oil and gas drilling in Brazil.
The report identified the three companies as "key insurers" for Petróleo Brasileiro SA - Petrobras, Brazil's state-owned energy company, which it said extracts around 93% of the country's oil and gas. The climate group added that oil exploration off the coast of Brazil occurs in some of the "world's most sensitive ecological sites around the Great Amazon Reef" and threatens "both global climate stability and local ecosystems and peoples."
Chubb and Tokio Marine provide 60% and 40%, respectively, of Petrobras's general civil liability cover, Insure Our Future said, citing documents obtained through a freedom of information request. Chubb, Mapfre and Tokio Marine also provide 50%, 40% and 10%, respectively, of the company's transport insurance. Marine mutual insurers Gard P&I Ltd. and Skuld UK P&I provide marine protection and indemnity cover to Petrobras, the report added. In addition, Brazilian insurer Austral Seguradora SA provides 100% of the energy giant's cover for production and exploration-related risks to goods and equipment.
The environmental group said involvement in Brazil's offshore oil and gas production is at odds with past statements insurers have made on climate change and sustainability.
"To live up to its sustainability rhetoric, Chubb — along with Liberty Mutual, Mapfre, and Tokio Marine — need to immediately rule out support for oil and gas expansion projects in Brazil and worldwide," Elana Sulakshana, senior energy finance campaigner at Rainforest Action Network, said in the Insure Our Future release.
Chubb and Tokio Marine, along with Liberty Mutual Group Inc., Axa SA, Fairfax Financial Holdings Ltd., Argo Group International Holdings Ltd. and several Brazilian insurers, provided performance bonds for multinational companies involved in exploratory oil and gas operations, the group said.
Transition plans
The report also said Axa adopted a new policy in 2021 under which it would stop insuring new upstream oil greenfield exploration projects, though the French insurer would make an exception for companies with credible transition plans. Axa expects to determine which transition plans are credible by the end of 2022 and will then cease coverage after a 12-month grace period, which the Insure our Future report said meant it could continue covering Brazilian energy company Phoenix Óleo & Gás at least until the end of 2023.
Axa in an emailed statement said that surety insurance, such as the cover it provides to Phoenix Óleo & Gás, falls within the scope of its new internal restrictions. The company also said in its email that some of the business it had underwritten before implementing its new policy was on a multiyear basis and could not be exited before the contract expired, which was the case with Phoenix Óleo & Gás. Axa added that the situation would be reassessed at the end of the contract.
On its climate and energy policy more generally Axa said it wants to "support and be part of the transition."
"We aim at the same time to still support the companies that are strongly committed in the transition with a robust shift plan and invest in clean energy," the insurer said.
Mapfre said in an emailed statement it was committed to "steadily and progressively raise the demand for sustainability, accompanying society in a fair transition." The company added in Brazil specifically, it provides part of the insurance for one marine oil exploration and production platform and the rest of its exposure is insurance for maritime transport, but it could not provide more specific information.
Gard and Skuld declined to comment. The other insurers and Petrobras did not respond to requests for comment prior to publication.