The insurance industry functions by assessing and managing risks as well as mitigating threats — that includes the threat of global warming. Many global insurers are addressing environmental and social risks through initiatives to reduce carbon emissions, divest from fossil fuels and promote sustainable practices. However, a recent analysis concluded that 46% of the world's top insurers presented "poor management of material risks and opportunities" related to climate change, including major U.S. property and casualty insurers such as AIG, Allstate and Nationwide. In the "Insuring Disaster" report, the nonprofit ShareAction examined how 70 of the world's largest insurance carriers approach responsible investment governance. The process included surveying insurers on their investment and underwriting activities and assigning scores in four weighted sections: governance (31%), biodiversity (23%), climate change (23%) and human rights (23%). Each insurer was assigned an absolute score and then a rating, which was calculated relative to peers based on the number of standard deviations from the mean score. The ratings include:

• AAA — Gold standard: Best practice performance in managing risks and opportunities and impacts across all assessed themes.
• AA-A — Leaders: Strong management of risks and opportunities as well as impacts across multiple themes.
• BBB-B — Challengers: Management of risks and opportunities, building capacity in accounting for impacts across some themes.
• CCC-C — Building capacity: Building capacity in the management of risks and opportunities across some themes.
• D — Business-as-usual: Little evidence to suggest adequate management of material risks and opportunities.
• E — Laggards: Evidence suggests poor management of material risks and opportunities.

In 2021, ShareAction did not award any insurers with an AAA or AA rating. "While some insurers demonstrate leadership in particular areas, none are performing strongly across all of the topics we addressed," the ESG-focused nonprofit said in its report. "The scale and urgency of current ecological and social crises demand far more than a 'business-as-usual' approach from insurers, who are encouraged to use the ranking and findings in this report to benchmark their own performance and drive improvements where needed." Visit the ShareAction website for more information about the study and review the above slideshow to discover the highest-ranking insurers for responsible investment themes. Related: 

• 5 countries most prepared for the climate change crisis
• 5 nations most vulnerable to economic shock from climate change
• How insurance is being called to lead in the climate crisis