Reinsurer Swiss Re's headquarters are seen on the banks of Lake Zurich in Zurich, Switzerland February 21, 2019.
Reinsurer Swiss Re's headquarters are seen on the banks of Lake Zurich in Zurich, Switzerland February 21, 2019. Reuters / ARND WIEGMANN

Swiss Re, the world's second biggest reinsurer, said it would increase the number of oil and gas producers for which it refuses cover, following mounting pressure on big business to help the drive to curb a global temperature rise.

In its annual sustainability report on Thursday, Swiss Re said from July 2023, it would no longer provide individual insurance to oil and gas companies responsible for the world's most carbon-intensive 10% of production.

In 2021, it had eliminated 5% of the world's most polluting oil and gas companies based on their carbon intensity, a measure of emissions per barrel of oil or unit of natural gas produced.

Although that leaves 90% covered, the shift is an important signal from "one of the world's ultimate risk managers," Peter Bosshard, global coordinator of NGO Insure Our Future, said.

"Oil and gas operations need to be phased out in accordance with climate science or they may become uninsurable by the end of the decade," he said.

Increased rigour by Swiss Re and others in the sector follows a series of reports that have highlighted the urgency for change.

Last year, the International Energy Agency report said no more new oil and gas fields should be developed if a target of capping planetary warming at 1.5 degrees Celsius (2.7 Fahrenheit) above the pre-industrial average by mid-century is to be met.

In line with the IEA report, Swiss Re said it would no longer insure projects that get the go-ahead from their parent company from 2022, unless the company has an independently verified, science-based plan to reach net-zero emissions.

By 2025, Swiss Re said it wanted half of its overall oil and gas premiums to come from companies aligned with such a net-zero by 2050 plan, and by 2030 all its clients in the sector should have done so.

Also, from 2022, the company said it will no longer insure companies or projects with more than 10% of their production in the Arctic, apart from Norwegian producers.

On the issue of facultative reinsurance, whereby it insures bundles of risk in a job lot, Swiss Re said it expected to finalise a policy for the oil and gas sector in 2023.