(Bloomberg) -- What was once the world’s biggest climate alliance for insurers is now being discontinued, after a wave of attacks by the Republican-led anti-ESG movement. 

The Net Zero Insurance Alliance will instead be replaced by the Forum for Insurance Transition to Net Zero (FIT), convened and led by the United Nations Environment Programme, according to a statement on Thursday. The decision takes effect immediately, UNEP said.

The move comes after NZIA suffered a mass exodus last year, as key members balked at threats of litigation from attorneys general across mostly GOP-led states. The alliance, according to the AGs, allegedly raised antitrust questions and risked contributing to inflation by adding to insurers’ costs. NZIA defectors included Munich Re, Lloyd’s of London, Allianz SE and Axa SA.

The new group, FIT, has been built in a way that “takes into account the experience gained” at NZIA, UNEP said in the statement. That includes creating a legal team that comprises experts on antitrust and competition law, it said. 

“We believe that the NZIA was compliant with antitrust laws and we believe that this new forum is an even safer space for complementary efforts on climate action,” Butch Bacani, head of insurance at UNEP, said in an interview.

NZIA was convened by the UN in 2021 and joined a group of other finance-sector climate groups under the umbrella of the Glasgow Financial Alliance for Net Zero. GFANZ is co-chaired by Mark Carney, who is the chair of Bloomberg Inc.’s board and a former Bank of England governor, and Michael R. Bloomberg, the founder of Bloomberg News parent Bloomberg LP.

FIT, which isn’t part of GFANZ, won’t require members to set interim decarbonization targets for insurance underwriting portfolios. Instead it will provide expert support to help insurers figure out how best to align their businesses with the goal of reducing emissions and limiting global warming, according to the UNEP statement. The structure is the result of months of consultations, UNEP said.

The new group’s goals include “advancing frameworks” for net zero insurance metrics and voluntary targets, as well as developing new net zero insurance concepts and creating a net zero transition plan framework for insurers, UNEP said.

While most of the work to date has focused on property and casualty cover, FIT also will consider life and health underwriting portfolios, as well as claims management activities, Bacani said.

FIT’s founding “participants” comprise 19 insurers and reinsurers from around the world, including Aviva Plc, Beazley Plc, Credit Agricole Assurances, Assicurazioni Generali SpA, Intesa Sanpaolo Vita and NN Group NV.

In addition, a consultative group of insurance regulators and supervisors will comprise 16 members, including representatives from the Bank of England’s Prudential Regulation Authority, the European Insurance and Occupational Pensions Authority and the Monetary Authority of Singapore.

There also will be a separate science, research and civil society consultative group, while representatives from Freshfields Bruckhaus Deringer will act as FIT’s legal counsel. In addition, the group will have two legal advisers, one from Cleary Gottlieb Steen & Hamilton and one from Norton Rose Fulbright.

©2024 Bloomberg L.P.