Press Releases

KoSIF Publishes 2024 Korea Insurance Scorecard

Korean insurers score only 0.9 out of 10 on climate risk management,
significantly lagging behind global peers  

- Korean insurers’ fossil fuel insurance exposure reached KRW 182trillion, while renewable energy insurance stood at only KRW 25trillion 

- Weak exclusion policies, broad loopholes, lack of phase-out plans, and insufficient oil and gas policies continue to undermine climate risk management 

The Korea Sustainability Investing Forum (KoSIF) has published the 2024 Korea Insurance Scorecard, assessing the fossil fuel-related policies and climate risk management practices of major Korean insurers. The report finds that Korean insurers scored an average of only 0.9 out of 10, showing a significant gap with global peers. By comparison, the average score of 10 major global insurers was 4.7 out of 10. 

KoSIF emphasized that Korea’s insurance industry urgently needs a structural shift to keep pace with global trends in climate risk management. 

The Korea Insurance Scorecard evaluates insurers’ fossil fuel-related policies and climate risk responses by reviewing whether they have restrictions on underwriting and investment for fossil fuel projects, phase-out plans aligned with fossil fuel reduction, and greenhouse gas reduction targets. This year’s assessment covered 10 major Korean insurers, based on data obtained through the Financial Supervisory Service and the office of National Assembly Member Kim Hyun-jung. 

Korean insurers scored an average of 1.0 in underwriting and 0.8 in asset management, resulting in an overall average of 0.9 out of 10. Samsung Fire & Marine Insurance ranked first with 2.0 points, followed by Lotte Non-Life Insurance with 1.4 points and Hanwha General Insurance with 1.3 points. Korean Re received the lowest score, with only 0.1 points. 

Some positive developments were identified. Samsung Fire & Marine Insurance was able to take first place because of relatively stronger restriction policies on new fossil fuel projects, including oil and natural gas. Lotte Non-Life Insurance and Hanwha General Insurance also received relatively higher scores after adopting policies covering the broader coal value chain. However, despite these signs that Korean insurers are beginning to recognize climate risks and establish related policies, the overall gap with global standards remains substantial. 

Note: Global Scorecard scoring bands — Green: top performers (7.1–10); Yellow: middle performers (3.5–7); Orange: lower-middle performers (1.4–3.4); Red: low performers (0.0–1.4). 

[Figure 1] Scores and Rankings of Major Korean Insurers 

Coal policies weakened by loopholes and lack of phase-out plans 

Korean insurers generally restrict only new coal-fired power plants or apply policies at the project level, meaning that coverage for existing clients or entire companies can continue. As a result, the actual impact of these restriction policies remains limited. Many insurers also still lack fossil fuel policies that cover oil and natural gas. 

By contrast, leading global insurers are implementing fossil fuel phase-out policies across the full coal, oil, and gas value chains, covering not only new contracts but also existing exposures. They are increasingly applying restrictions at the client or company level to drive portfolio-wide transition pressure. 

Loopholes remain a major concern. While all 10 Korean insurers have policies restricting underwriting for new coal projects, six of them include exceptions. Some insurers continue to allow operational insurance, extensions or increases of existing contracts, and insurance for auxiliary facilities, citing risk diversification for hedging purposes or the need to maintain existing contracts. These exceptions significantly weaken the effectiveness of coal restriction policies. 

Korean insurers also lack phase-out plans or reduction roadmaps for existing coal underwriting. This stands in clear contrast to leading global insurers such as Allianz and AXA, which have set coal phase-out deadlines of 2030 for OECD countries and 2040 globally. 

“Korean insurers’ climate risk responses remain mostly declaratory,” quoted by Yoonseo Kang, ESG Finance Researcher at KoSIF. “They need to move toward structural transition by expanding coverage of coal policies beyond power generation to metallurgical coal and other high-carbon sectors, building comprehensive risk management frameworks that include oil and natural gas, setting concrete sustainable energy investment targets, and establishing and disclosing fossil fuel phase-out plans.” 

Fossil fuel support continues to grow despite rising climate-related losses 

According to the report, the global insurance industry has suffered approximately USD 600 billion in losses from climate change over the past two decades. Climate-related damages are also rising in Korea. According to the Ministry of Agriculture, Food and Rural Affairs, payouts from agricultural disaster insurance exceeded KRW 1 trillion in 2023, reached KRW 1.0171 trillion last year, and are expected to increase again this year. 

Despite these growing losses, Korean insurers’ support for fossil fuels has continued to increase. As of June 2024, outstanding fossil fuel insurance exposure reached KRW 182.7 trillion, up 30.7% from the previous year in the first half of 2024 alone, revealing a clear gap between insurers’ coal phase-out commitments and actual practices. 

[Figure 2] Fossil Fuel vs. Renewable Energy Insurance Exposure Over Time 

Support for renewable energy remains largely stagnant. At the same point in time, Korean insurers provided KRW 24.8 trillion in insurance coverage for renewable energy projects, equivalent to only 13.6% of their KRW 182.7 trillion fossil fuel insurance exposure. The report also points out that investment capital withdrawn from fossil fuel finance has not been redirected toward renewable energy, indicating a lack of meaningful asset reallocation to support the energy transition. 

Between 2022 and the first half of 2024, outstanding fossil fuel-related investments declined by 5.6%, from KRW 12.4 trillion to KRW 11.7 trillion. Over the same period, renewable energy-related investments increased by only 2.3%, from KRW 4.3 trillion to KRW 4.4 trillion. New financing for renewable energy also declined, from KRW 0.4 trillion in 2023 to KRW 0.1 trillion in the first half of 2024, suggesting that insurers are largely maintaining existing commitments rather than actively expanding support for the transition. 

The report identifies the absence of concrete reduction targets and phase-out plans, including for financed emissions and insurance-associated emissions, as a key reason for this gap. Only three Korean insurers have set net-zero targets that reflect financed emissions. 

“More than 90% of insurers’ total carbon emissions come from financed emissions, meaning that net-zero targets that do not reflect these emissions may fall short of addressing insurers’ full climate impact,” said Yoonseo Kang. “This should not be seen only as a greenhouse gas reduction issue, but as a strategic measure for insurers to protect themselves from stranded asset risks arising from stronger climate policies and the energy transition.” 

Karl Yang, Executive Director of KoSIF, said, “The insurance industry is a core institution for managing and distributing social risks. Korean insurers must systematically manage climate risks by reducing support for fossil fuels and setting science-based emissions reduction targets. By doing so, they can become credible partners in the global net-zero transition while also safeguarding asset soundness and customer trust.” 

About the Global Scorecard 

The Global Insurance Scorecard is published annually by Insure Our Future, a global campaign highlighting the role of the insurance industry in the climate crisis. It evaluates and scores the underwriting and investment policies of 30 major global non-life insurers and reinsurers on coal, oil, and natural gas. The Scorecard calls on global insurers to stop supporting new fossil fuel projects and phase out support for existing coal, oil, and gas operations in line with the 1.5°C climate goal. 

The Korea Insurance Scorecard is developed and published by KoSIF based on the global assessment framework. It aims to monitor and analyze the climate risk management status and policy responses of the Korean insurance industry. 

Inquiries: Yoonseo Kang Researcher (yoonseokang@kosif.org), Dajeong Kim  Senior Researcher (kimdj@kosif.org)