Marine insurer portfolios lag behind IMO and Paris Agreement 2050 targets

The latest report from the Poseidon Principles for Marine Insurance shows that the signatories' hull and machinery emissions exceed levels required to meet IMO and Paris Alignment targets.

PHOTO: The International Maritime Organisation's headquarters in Lambeth, London, UK. Getty Images

The Poseidon Principles for Marine Insurance are a voluntary set of standards that marine insurers can use to measure the climate alignment of their hull and machinery portfolios and assess their contributions towards climate goals.

Its signatories are Bermuda-based Fidelis MGU, marine hull underwriters Hellenic Hull and Norwegian Hull Club, UK-based Navium, reinsurance companies SCOR and Swiss Re Corporation and the Canadian insurance company Victor Insurance.

According to its annual disclosure report, the signatories' portfolios averaged 12.7% above the IMO's 2050 trajectory. This implies that the aggregate greenhouse gas emissions (GHG) from their hull and machinery portfolios were 12.7% higher than what is necessary to meet the IMO's target of reducing GHG emissions from international shipping by 50% by 2050, compared with their 2008 levels.

The portfolios also averaged 20.8% above the Paris Agreement’s ambition of net-zero emissions by 2050.

Among the eight signatories, Fidelis MGU, Navium, and Swiss Re were the most misaligned, whereas SCOR and Victor Insurance were well-aligned with the IMO and Paris Agreement goals.

There is a disclaimer in the annual report that the report is based on fuel consumption data from 2021 and does not cover the companies' entire hull and machinery portfolios, since not all of them provided the data.

We will have to wait and see if the next annual report shows any clear signs of improvement, as the marine insurers' performance in 2021 may not be representative of their performance of 2022.

By Konica Bhatt

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