Insurer's Carbon Underwriting Policies
Interview with Olimpia Carradori, PhD Student at our Department: How carbon underwriting policies are changing the financial landscape and what this means for climate-compliant investments

Olimpia Carradori, a PhD student at the Department of Finance, conducts research in empirical corporate finance and sustainable finance. In a research paper co-authored withProf. Zacharias Sautner and Dr. Felix von Meyerinck, they study the structure, determinants, implementation, and implications of carbon underwriting policies adopted by some of the world's largest insurers.
This paper was recently presented by Olimpia at the NBER conference on climate finance on 10 October 2025. The NBER Climate meeting is a three-year research project which examines how investors and financial markets are both affected by climate change and how it can be mitigated. It supports studies that help investors understand climate risks in their portfolios and how their investments can support climate solutions. The project also gives guidance to companies that want to include climate goals in their investment decisions.
Interview

Dear Olimpia, thank you very much for taking the time for our interview. To begin our discussion of your research, could you explain who is responsible for defining and designing underwriting policies aimed at decarbonization?

Carbon underwriting policies are primarily defined and designed by insurers as a commitment to restrict the underwriting of risks of fossil fuels (coal, oil and gas).
These policies are typically quite heterogeneous in both structure and stringency. While there may be external influence from NGOs, public expectations, and regulatory trends, the actual content and adoption of policies are determined by insurers.
If an insurer declines to underwrite, do we see other insurers step into the breach?
Yes, within the context of coal mining in the U.S., we find evidence that when insurers that adopt coal underwriting policies restrict coverage, other insurers may step in.
Do we see differences between regions?
Yes, we find that the adoption and stringency of coal underwriting policies is significantly higher among European-headquartered insurers than among insurers headquartered in the U.S. or Asia.
Which elements do strict policies towards decarbonization include?
The strictest policies are those that explicitly exclude insurance for all new and existing coal projects, commit to a full coal phase-out with a clear transition strategy, include detailed phase-out plans, and involve active engagement with clients to support decarbonization.
We find that, in the context of U.S. coal mining, reductions in insurance coverage following coal underwriting policy adoption are more pronounced among insurers with more stringent policies.
How did you measure the policies?
Carbon underwriting policies are recent and generally lack a standardized format, and insurance contracts of fossil fuels are mostly not publicly available.
To overcome these empirical challenges, first, we leveraged standardized carbon underwriting policy trackers from Insure Our Future, an NGO coalition. Second, we collected insurance certificates of U.S. coal mines via FOIA requests.
This allowed us to quantify the presence and stringency of policies over time and across insurers, and to link these insurers to the U.S. coal mines they provide coverage for.
What direct or financial incentives so insurers have to implement carbon underwriting policies, apart from idealistic motives?
Insurers may have several incentives to adopt carbon underwriting policies. For instance, they may have a direct financial interest in the net-zero transition of the economy, as they bear a significant share of the costs of climate-related disasters, and they may be motivated by reputational incentives.
In your paper, you call for greater transparency in underwriting practices and public disclosure of insured exposures. What hurdles need to be taken?
Studying the insurer side is challenging because public reporting does not reveal the underwriting portfolio: public data show insurer-wide outcomes and not the carbon-relevant share. Hence, we call for standardized disclosure of underwriting exposures to fossil fuels.
Thank you very much for sharing these insights with us.
More information:
Carradori, Olimpia and von Meyerinck, Felix and Sautner, Zacharias, Insurers' Carbon Underwriting Policies (September 23, 2025). European Corporate Governance Institute – Finance Working Paper No. 1071/2025, Swiss Finance Institute Research Paper No. 25-58, HKU Jockey Club Enterprise Sustainability Global Research Institute Paper No. 2025/094, Available at SSRN: https://ssrn.com/abstract=5285182 or http://dx.doi.org/10.2139/ssrn.5285182
National Bureau of Economic Research (NBER): Climate Finance Conference, Fall 2025
Photo source: Matthias Heyde via Unsplash
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