Six of the world’s leading marine insurers have launched today a groundbreaking initiative to provide transparency on carbon emissions and support the shipping industry’s green transition.
The Poseidon Principles for Marine Insurance are a framework to quantitatively assess and disclose the climate alignment of marine insurers’ underwriting portfolios and follow on from a similar initiative inked between many of the world’s top ship finance houses. This insurance 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 endeavour 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. 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,” said Patrizia Kern, marine head at Swiss Re Corporate Solutions and chair of the drafting committee for the Poseidon Principles for Marine Insurance.
Signatories to the Poseidon Principles for Marine Insurance commit to assessing and disclosing the climate alignment of their hull and machinery portfolios, and to benchmarking 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 decarbonisation 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.
Founding signatories include Swiss Re, Gard, Hellenic Hull Management, SCOR, Victor International, and Norwegian Hull Club. Additional marine insurers are expected to join in the near future. Affiliate members supporting the principles are Willis Towers Watson, Cefor, and EF Marine.