Insurers State Farm and Berkshire Boost Investments in Fossil Fuels
While many insurers have reduced their investments in fossil fuel companies, State Farm, the largest U.S. home and auto insurer, and Berkshire Hathaway’s insurance companies have boosted their investments in oil and gas firms over the past decade, an analysis by The Wall Street Journal showed on Wednesday.
Fossil fuel financing and insurance have come under scrutiny in recent years as ESG policies have become mainstream for many investors.
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The Journal has now analyzed annual filings of insurers’ investments in stocks and bonds obtained from the National Association of Insurance Commissioners, a non-governmental organization that supports U.S. insurance regulators.
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Between 2014 and 2023, State Farm and Berkshire’s insurers boosted their investments in oil and gas firms, even if more than half of the 236 property-and-casualty insurers in the Journal’s analysis reduced their spending on stocks and bonds issued by fossil fuel companies.
State Farm, which has invested billions of U.S. dollars in stocks and bonds of companies including ExxonMobil, Chevron, and Diamondback Energy, has raised the share of fossil fuel investments in its $142.7 billion portfolio to 3.6% in 2023, up from 2.6% back in 2014, the Journal’s analysis found.
Berkshire Hathaway’s insurance firms, for their part, reported they spent $39.9 billion on fossil fuels stocks and bonds in 2023. This has raised the share of investments in fossil fuels to more than a fifth of their overall $183 billion in holdings, according to the Journal’s analysis.
The big spending on fossil fuels from Berkshire Hathaway is not surprising, considering Warren Buffett’s bet on Occidental, in which his conglomerate has heavily invested over the past year.
As a result of the rising fossil fuel investments by Berkshire Hathaway and State Farm, the overall exposure of the U.S. property-and-casualty insurance industry to fossil fuels rose to 4.4% of portfolios in 2023. This compares with 3.8% of investments in portfolios in fossil fuels in 2014, the WSJ analysis found.
By Tsvetana Paraskova for Oilprice.com
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