Chubb unveils new oil/gas extraction underwriting criteria

Chubb has unveiled new underwriting criteria for oil and gas extraction projects that will require clients to reduce methane emissions, a by-product of oil and gas production that are among the most severe greenhouse gases.

Chubb also announced that it will not provide insurance coverage for oil and gas projects in government-protected conservation areas in the World Database on Protected Areas that do not allow for sustainable use. The underwriting criteria for oil and gas extraction are part of an ongoing collaboration and consultation with environmental stakeholders and experts.

"The methane-related underwriting criteria that Chubb has adopted – the first of their kind in our industry – are focused on the balance between the need to transition to a low-carbon economy and society's need for energy security," said Evan Greenberg, chairman and CEO of Chubb.

"As a company, we are accelerating and expanding our climate-related initiatives without committing to sweeping net-zero pledges for which, in our judgment, there is not a viable path to achieve. We will continue to pursue in earnest a responsible, realistic and science-based approach. Implementing these underwriting criteria encourages oil and gas producers to adopt technologies to reduce GHG emissions in extraction. We know that many of our clients in the industry are already committed to limiting methane emissions and we will work to expand those commitments."

In 2019, Chubb was the first insurer with significant US operations to limit coal-related underwriting and investment, a policy later extended to oil sands projects underwriting. More recently, Chubb launched a new climate business unit, Chubb Climate+, which will provide insurance products and services to businesses engaged in developing or employing new technologies and processes that support the transition to a low-carbon economy.

"Our policy on not insuring energy projects in protected areas also reflects our approach to setting clear guidelines to sustain biodiversity and protect nature," continued Greenberg. "Taken together, our new underwriting criteria, along with our other substantive actions, are grounded in our commitment to lead the industry in the transition while balancing the need for energy security."