"Australian Ethical Increases Public Push toward QBE Regarding Fossil Fuel Insurance Coverage"
In a move that has escalated the debate over insurers' role in financing fossil fuel projects, Australian Ethical, a leading superannuation fund and investment manager managing over $13 billion, has taken its concerns directly to QBE Insurance.
The dispute, which dates back to 2016, centres around QBE's underwriting of fossil fuel projects and its alignment with climate goals. In March 2023, Australian Ethical wrote to QBE's board seeking clarifications over these issues, but was reportedly disappointed with the response.
Despite ongoing engagements, specific outcomes or commitments from these discussions are not detailed in the available information. However, Australian Ethical has expressed its concerns about insurers supporting fossil fuel expansion beyond science-based guidance, and has identified cutting off fossil fuel financing as one of its strategic priorities.
One of the key issues at hand is QBE's policies, which Australian Ethical claims allow underwriting for new oil and gas projects without an assessment for Paris Agreement alignment. This, according to Australian Ethical, is unjustified, especially given the increasing pressure on insurers to stop underwriting fossil fuels due to the impact of climate-related events on their profit margins.
Australian Ethical holds $56 million worth of shares in QBE, a listed Australian insurer. In 2023, the fund escalated its engagement by voting against the re-election of QBE's directors over fossil fuel underwriting. This was followed by an unprecedented step in 2025, when Australian Ethical moved its engagement with QBE into the public realm, hoping to create a public outcry and pressure QBE to do better.
Amanda Richman, Australian Ethical's ethical stewardship lead, is urging QBE to disclose the information needed for shareholders to make informed decisions. She questions whether QBE's board and management are making decisions in the insurer's long-term interests, due to lack of transparency in their decision-making process.
Approximately 50% of QBE's underwriting portfolio is in property and agriculture, sectors exposed to physical risk due to climate change. This raises concerns about QBE's business model and its potential impact on climate risk and future earnings.
In 2019, Australian Ethical co-filed a shareholder resolution at QBE, resulting in QBE announcing a coal exposure phase out. However, the current focus remains on QBE's fossil fuel underwriting practices and its commitment to climate science.
As the debate continues, Australian Ethical is calling for disclosure of how much of QBE's current underwriting may need to be exited due to climate change over the next three decades. The fund is urging QBE to adopt responsible underwriting practices that align with climate science and help drive the transition to a low-carbon economy.
In light of the ongoing debate, Australian Ethical has emphasized the need for QBE Insurance to align its underwriting practices with climate goals, particularly in the context of fossil fuel projects, as proposed by scientific guidelines for climate change. Australian Ethical's concerns extend to QBE's business model, given the potential risks and impact of climate change on their investments in property and agriculture.
