The chief executive of Aviva has defended the Net Zero Insurance Alliance despite departures by several firms in the past few months, saying the initiative is caught in a “political crossfire”.

The British insurer is one of the remaining 12 members of the alliance in this “gloomy time” as described by Amanda Blanc. Munich Re openly cited antitrust risk as the reason for leaving the group, but many quit following pressure from US authorities who claimed that NZIA’s requirements and targets appeared to violate federal and state antitrust laws. Departed members said they would continue to meet decarbonisation objectives outside the alliance.

Blanc said the final state of the NZIA is not yet clear but “what is clear is that the NZIA will not go forward as originally planned” as a voluntary initiative to have member set net zero underwriting targets.

Antitrust risk usually affects firms with significant operations in the US, but some insurers such as Australia’s IAG and Canada’s Beneva, which have no apparent exposure to the US, recently joined the growing list of companies leaving the alliance. Blanc blamed political reasons as the result of the NZIA exodus. 

In a pre-recorded video to the Association of British Insurers Climate Change Summit on Tuesday, she said: “The majority of founding members have departed but the remaining [members] have been trying to find a way forward to protect the legacy of the group.

“I don't want to criticise those who left. The NZIA was caught in political crossfire and each member had to respond in a way that made no sense to their business.”

She said political headwinds are temporary but if no action is done to tackle climate change, catastrophic results "will be the norm".

“Unlike political posturing, climate change will be permanent if we don't act together to tackle it. It is so important for all of us in the UK insurance industry who do want to see action on climate to reflect on what has happened to the NZIA and think about the next steps. Just because members have left doesn't mean the problem has gone away.”

Roger Jackson, partner and insurance ESG lead at KPMG, argued in some US states, mainly Republican, there are questions about the legality of insurers setting underwriting appetite based on policyholders’ attitude to climate, as opposed to a risk factor.

Speaking at a panel discussion at the same event, he said: “What that means is for general insurers in particular, if you're not able to price on that basis, I think that does significantly weaken the ability to influence or nudge the global economy to decarbonise.”

Jackson observed a “strong commitment to net zero” from insurers, including those that have left the NZIA.