Allianz reported a mixed bag of results in its latest annual sustainability statement, highlighting both advancements in sustainable solutions and a concerning rise in emissions intensity within its commercial insurance operations.
The German insurance giant saw its revenue from sustainable solutions in the property and casualty (P&C) business surge to 4.9 billion euros ($5.3 billion) in 2024, a substantial 63% increase compared to the previous year. This growth was fueled primarily by increased business in onshore wind, solar energy, and electric vehicle battery manufacturing.
However, the company’s annual report noted that emissions intensity in its commercial business increased. According to the report, emission intensity in the commercial insurance segment in 2024 was 0.23 kilotonnes of carbon dioxide equivalent per 1 million euros. Although this figure represented an 11.7% reduction from the 2022 baseline, it marked a 6.4% increase compared to 2023.
Allianz’s latest sustainability statement is its first fully compliant report with the EU’s Corporate Sustainability Reporting Directive. Revenue in terms of gross written premium (GWP) from low-carbon solutions grew by 25% compared to the 2022 baseline. Sustainable investments also grew by 2.7% in 2024, reaching 171.9 billion euros.
The company reported a 50.7% reduction in absolute greenhouse gas emissions in its corporate proprietary investments against a 2019 baseline, aligning with its target to achieve a 50% reduction by 2030. Additionally, Allianz achieved a 6.8% reduction in absolute carbon emissions in its motor retail insurance business compared to the 2022 baseline, with a 30% reduction target for in-scope motor retail portfolios in nine European markets by 2030.
For the commercial insurance segment, Allianz aims for a 45% reduction between 2022 and 2030 in the insurance-associated emissions intensity. This target applies to the in-scope sub-portfolio of large corporate companies insured by Allianz Global Corporate & Specialty. Currently, emission accounting methodologies are available for only 13% of premiums in the commercial segment.
Insurance-associated emissions for a commercial insurance policy are calculated by multiplying the Scope 1 and 2 emissions from the policyholder by the attribution factor provided by PCAF (insurance premium of the policy divided by the revenue of the customer).
The Allianz Standard for Integration of Sustainability contains four energy-related guidelines applied to proprietary investments and P&C insurance, including facultative reinsurance. The guidelines focus on thermal coal, oil sands, oil and gas, and renewable/low-carbon energy.
The report explained, “The three fossil fuel guidelines define business practices and business models where we do not provide further services or investments along defined technical exclusion criteria. They typically differentiate between single-site restrictions (which apply to standalone P&C covers, as well as direct project investments) and restrictions on company-level exposures.”
“To support renewable and low-carbon technologies, we allow ring-fenced coverages of and investments into projects of companies that are otherwise restricted due to the fossil-related energy guidelines,” the report continued.
The report also addressed potential climate change-related risks, including those related to litigation. “Within the commercial P&C business, insured parties may be subject to climate change-related litigation in future owing to alleged greenwashing incidents, responsibility for damages due to historical greenhouse gas emissions, and other potential issues.”
Allianz also acknowledged potential challenges in its retail business. “For our retail business, customers may require new products or coverages in response to decarbonisation-related lifestyle changes; Allianz may also suffer reputational damage if our own decarbonisation efforts fall short of stakeholder expectations,” the report stated.
The report concluded by highlighting potential issues such as insurance affordability, pricing difficulties due to limited historical data, and increased loss ratio volatility.
