Chubb Mandates Natural Gas, Oil Clients Reduce Methane ... - Natural Gas Intelligence

Chubb Mandates Natural Gas, Oil Clients Reduce Methane Emissions to Obtain Insurance - Natural Gas Intelligence

Energy Transition| NGI All News Access

Chubb Mandates Natural Gas, Oil Clients Reduce Methane Emissions to Obtain Insurance

​​Chubb Ltd., the world’s largest publicly traded property and casualty insurer, has updated underwriting criteria for natural gas and extraction projects to require clients to reduce methane emissions.

The Swiss-based insurer, which collaborated with stakeholders on the criteria, has most of its business in the United States.

“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,” CEO Evan G. Greenberg said.

“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.”

Greenberg said Chubb “will continue to pursue in earnest a responsible, realistic and science-based approach.” The new criteria “encourages” producers to adopt technologies to reduce greenhouse gas emissions.

“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.”

Many major natural gas and oil producers have made commitments to reducing methane emissions, including BP plc, Chevron Corp., ExxonMobil and Shell plc. U.S. natural gas pipeline infrastructure companies, including Williams, are also aiming to reduce emissions.

Executives have said that certifying their natural gas supply offers customers a transparent way to view emissions. Verifying methane emissions is considered a key selling point for many gas customers, according to MiQ.

Under the criteria, Chubb said it would “continue to provide insurance coverage for clients that implement evidence-based plans to manage methane emissions including, at a minimum, having in place programs for leak detection and repair and the elimination of nonemergency venting. Clients have to adopt “one or more measures” that reduce emissions flaring.

“These criteria will commence immediately, and customers will have a set period of time to develop an action plan based on their individual risk characteristics,” the company stated. “Chubb will also create a customer resource center to support oil and gas insureds in identifying and adopting methane emissions reduction technologies.”

Chubb also no longer plans to provide coverage for gas and oil projects in “government-protected conservation areas in the World Database on Protected Areas,” which do not allow for sustainable use. These include projects in protected areas designated by state, provincial or national governments. The protected areas include nature reserves, wilderness areas, national parks/monuments, habitat/species management areas, and protected landscapes/seascapes.

By the end of this year, Chubb plans to adopt standards for projects in affected areas as defined by the World Database of Protected Areas. Chubb also is adopting standards for gas and oil extraction projects in the Arctic, Key Biodiversity Areas, mangrove forests and global peatlands that are not currently listed in the World Database.

“Our policy on not insuring energy projects in protected areas also reflects our approach to setting clear guidelines to sustain biodiversity and protect nature,” Greenberg said. “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.”

In 2019, Chubb became the first insurer with significant U.S. operations to limit coal-related underwriting and investment, a policy later extended to oilsands projects.

Chubb recently launched Chubb Climate+, which provides insurance products and services to businesses “engaged in developing or employing new technologies and processes that support the transition to a low-carbon economy.” The unit also provides risk management and resiliency services to help manage the impact of climate change.

© 2023 Natural Gas Intelligence. All rights reserved.

ISSN © 2577-9877 | ISSN © 2158-8023 |