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Ethical Insurance

What is ethical insurance, which insurance companies are ethical in the UK, and how can you find ethical insurance options? 

What is ethical insurance?

Insurance companies are major investors, putting money towards everything from weapons to solar and wind energy. Ethical insurance companies invest responsibly. For example, they may have a policy not to invest in fossil fuels.

Unfortunately, ethics is extremely weak in this sector (with only one standout provider – see below). We also look at whether companies are making steps in the right direction. This means being transparent with their customers about what their policies are, who they’re invested in, and whether they engage with them to push for better practice. Transparency allows consumers and NGOs to hold them to account. 

Which insurance companies are ethical in the UK? 

In reality, very few insurance companies in the UK are ethical – with only one standout ethical provider. Naturesave and its sister company Ecclesiastical aim “to sell insurance that is 100% fossil fuel free." While they haven’t got there yet, they do have policies to limit investments in coal and consider a range of other ESG factors – a step beyond most insurance brands.

Naturesave offers insurance for home, travel, renewable energy, businesses, and charities (but not car insurance).

However, you’ll want to check which company is acting as underwriter for the policy you plan to take out (we explain more in the box below). They usually work with Ecclesiastical, their sister company which shares their values, but for some policies the underwriter will be another investor which does not have the same ethics.

Are major insurance companies in the UK ethical?

Most other UK insurance companies perform badly when it comes to ethics.

Many are high risk for likely use of tax avoidance and several big names including AXA and Lloyds Bank have been named and shamed for their investments in nuclear weapons. Zurich and AXA continue to insure new oil and gas projects in defiance of climate science and evidence.

Our guides to Home, Car, Travel and Pet insurance rate and rank the major providers and compare steps they are taking to address climate change. We recommend one major provider taking a different approach. 

How to find an ethical insurance company?

Finding an ethical insurance company is complicated, particularly because the brand that you buy from is often not the brand that will invest the money.

Brokers are the public-facing brands and will sell you your policy; underwriters manage the investments and pay out the cash in case of a claim. Insurance underwriters manage around £1.8 trillion in investments in the UK, and are really the ones you want to look at when it comes to ethics.

Ethical Consumer’s guides to Home, Car, Travel and Pet insurance rate and rank major and ethical insurance underwriters. You can use our easy-to-understand tables to find the most ethical underwriters and buy direct from them.

If you want to do the research yourself, here are a few steps to take:

  1. Find out who the insurance underwriter is for the policy you are considering. This should be included in the key facts document on their website. 
  2. Check what the underwriter says about investment policies. For example, do they have a policy limiting their investments in coal? Do they have policies on issues like arms?
  3. Search for a list of their investments. The best companies publish these on their website, so you can check for problematic investments yourself. You may want to look for major fossil fuel companies like BP or Shell, or arm manufacturers, such as BAE Systems. 

How does Ethical Consumer rate insurance companies?

Ethical Consumer’s ratings take a holistic view at the ethics of insurance providers. We look at:

  • Which companies they are invested in. Brands lose marks for investing in everything from nuclear weapons to fossil fuels
  • Whether they have transparent and responsible investment policies, covering key issue areas like coal and carbon, deforestation, indiscriminate weapons, human rights abuses, and animal abuse.
  • Whether they publish a list of investments, so consumers can hold them to account. 
  • How much they pay senior members of staff: is it excessive?
  • Whether they look high risk for likely use of tax avoidance strategies.

We give an easy to follow rating based on the above so that you can compare your options in the Home, Car, Travel and Pet insurance guides. 

How to find other kinds of ethical insurance

If you’re looking for insurance outside of these areas (for example small business insurance), our guides can still help. You could start by checking out our Best Buy and Recommended companies, which provide some other insurance types.

The guides can also provide a handy benchmark: once you’ve found a few insurance companies that offer what you’re after, check to see if they’re in the guides. Their ratings will apply whatever kind of insurance you buy. 

Visit the money section to see the complete list of financial guides.