Insurance-Associated Emissions — Definition and GHG Accounting Context
Insurers sit at a different point in the climate system than banks. They do not lend capital — they absorb risk. When an insurer underwrites a coal plant or a vehicle fleet, it enables activity a lender would also finance, but through a premium rather than a loan.
Insurance-associated emissions are how that enabling role is measured — and the one number a re/insurer must not confuse with the emissions of its own investment book.
Insurance-associated emissions are the greenhouse gas emissions attributed to a re/insurer’s underwriting portfolio under PCAF Part C, using premium-based attribution rather than financing. They are reported separately from the insurer’s financed emissions.
Definition and PCAF Part C
Insurance-associated emissions extend PCAF’s attribution logic from lending and investing to risk transfer. Defined in the PCAF Insurance-Associated Emissions Standard (Part C), first published in November 2022, they attribute a share of an insured party’s emissions to the re/insurer in proportion to the insurer’s role in that party’s economics — measured through premiums rather than through an outstanding loan or holding. The mechanism is the same attribution factor that underpins every PCAF module: a ratio that apportions a counterparty’s emissions to the financial institution, multiplied by the counterparty’s emissions.
Part C addresses the underwriting book only. The first edition covers commercial lines and personal motor; other lines of business — property, liability, treaty reinsurance beyond motor — remain methodologically open at the time of writing, and PCAF flags them for future editions. The standard inherits PCAF’s data quality scoring, so every attributed figure carries a score from 1 (verified, asset-specific data) to 5 (highly estimated), making the reliability of the number explicit alongside the number itself.
Insurance-Associated Emissions at a Glance
The table below summarises the reportable characteristics of insurance-associated emissions as defined in PCAF Part C. Every entry is sourced from the PCAF Insurance-Associated Emissions Standard, First Edition (2022).
| Property | Value | Notes |
|---|---|---|
| PCAF module | Part C | Insurance-associated emissions — distinct from Part A (financed) and Part B (facilitated) |
| First edition published | Nov 2022 | First global standard for underwriting emissions |
| Attribution basis — commercial lines | premium ÷ revenue | Insurance premium over the insured party’s revenue |
| Attribution basis — personal motor | premium ÷ TCO | Premium over total cost of vehicle ownership |
| Emissions in scope | Scope 1 + Scope 2 | Of the insured party; Scope 3 phased per data availability |
| Data quality score | 1–5 | Score 1 = verified asset-specific; Score 5 = highly estimated |
| Lines covered (1st edition) | 2 | Commercial lines and personal motor; other lines deferred |
| Reported separately from | Financed emissions | The insurer’s investment portfolio is Part A, not Part C |
| Source standard | PCAF Part C (2022) | Insurance-Associated Emissions Standard, First Edition |
PCAF Insurance-Associated Emissions Standard, First Edition (November 2022) — the governing methodology for every value on this page.
Premium-Based Attribution — Why Premiums, Not Exposure
Because an insurer provides cover rather than capital, PCAF could not reuse the financed-emissions attribution factor unchanged. A lender’s claim on a counterparty is measured by the outstanding loan against the counterparty’s total value; an insurer has no comparable balance-sheet position. PCAF resolved this by using the annual premium as the numerator — the price of the risk transfer in a given year — and a denominator that reflects the insured party’s economic scale.
Commercial lines: attribution factor = insurance premium ÷ insured party’s revenue.
Personal motor: attribution factor = insurance premium ÷ total cost of vehicle ownership.
The factor is then applied to the insured party’s emissions to give the insurance-associated emissions, with a data quality score attached, exactly as in every PCAF module. PCAF chose premium over insured exposure (sum insured or limit) deliberately: premium is observed, audited, and reported annually, whereas exposure values are inconsistently defined across lines and prone to gaming. Using premium also aligns the metric with the period of cover, so the attributed emissions are an annual flow that maps cleanly to a reporting year.
Commercial Lines vs Personal Motor
PCAF Part C addresses two underwriting lines with different attribution denominators. The split exists because the two markets expose fundamentally different counterparties — companies with reported revenue on one side, individual vehicle owners with no revenue on the other.
Insured counterparty is a company with reported revenue
Attribution basis · The premium is divided by the insured company’s annual revenue, then applied to that company’s Scope 1 and Scope 2 emissions (Scope 3 phased as data matures).
- Property and casualty for industrial sites
- Energy, marine, and aviation hull
- Construction and engineering
- Specialty commercial risks
Insured counterparty is an individual vehicle owner
Attribution basis · The premium is divided by the total cost of vehicle ownership, then applied to the vehicle’s tailpipe emissions. Revenue is meaningless for a private policyholder, so TCO stands in as the scale denominator.
- Private passenger car policies
- Motorcycle and light personal vehicles
- TCO includes purchase, fuel, insurance, maintenance
- Vehicle emissions from manufacturer or registry data
The PCAF Insurance-Associated Emissions Calculator handles both lines and returns the data quality score alongside the attributed figure. Full derivations sit on the PCAF Insurance-Associated methodology page.
Worked Examples — Both Attribution Bases
The two examples below are illustrative snapshots, not live figures — they show how the attribution factor flows through to an attributed emissions number. Inputs are chosen for clarity; real submissions use the insured party’s reported emissions and the data quality score that matches the evidence available.
Both results carry a data quality score. The commercial example would score better if the 50,000 tCO₂e came from the insured company’s verified disclosure (Score 1–2) and worse if it were estimated from sector-average emission intensity applied to revenue (Score 4–5). The score travels with the number into the portfolio total.
Underwriting vs the Insurer’s Own Investments
An insurer has two distinct climate exposures and must not conflate them. Its underwriting portfolio produces insurance-associated emissions (Part C). Its investment portfolio — the assets backing technical reserves and capital — produces financed emissions (Part A), exactly like any other asset owner, using the financed-emissions attribution factor built on enterprise value including cash (EVIC) or outstanding amount. The two are reported separately and never summed: doing so would double-count the insurer’s relationship with any counterparty it both insures and invests in.
Insurance-associated emissions (Part C) and financed emissions (Part A) measure two different roles the insurer plays and rest on two different attribution factors. PCAF requires them disclosed as separate line items. A combined “total insurer emissions” figure is not a PCAF metric and will be flagged in assurance.
Where Part C Sits — the PCAF Three-Part Framework and Disclosure
PCAF’s accounting framework for the financial sector is built in three parts, each covering a different financial activity. Insurance-associated emissions are Part C; understanding the other two clarifies what Part C does and does not cover.
| Part | Covers | Attribution basis | Applies to an insurer’s… |
|---|---|---|---|
| Part A — Financed emissions | Lending and investing | Outstanding amount ÷ EVIC (or asset value) | Investment portfolio backing reserves and capital |
| Part B — Facilitated emissions | Capital-markets activity | League-table share × facilitation factor | Underwriting of securities issuance (where applicable) |
| Part C — Insurance-associated emissions | Insurance underwriting | Premium ÷ revenue or TCO | Underwriting book |
| Disclosure context | CSRD, IFRS S2, CDP, NZIA legacy commitments | n/a | Reported as financial-sector Scope 3 Category 15 analogue |
On the disclosure side, insurance-associated emissions feed the same regimes that govern the rest of a re/insurer’s climate reporting: IFRS S2 and CSRD/ESRS E1 both require financed and facilitated emissions disclosure for financial institutions, and the CDP Climate Change questionnaire collects portfolio emissions for the financial-services sector. PCAF Part C is the measurement methodology that produces the underwriting number those frameworks ask for.
Four Mistakes Reviewers Flag
Related terms and tools
Frequently asked questions
They are the greenhouse gas emissions attributed to a re/insurer’s underwriting portfolio, measured under PCAF Part C. Attribution is premium-based rather than financing-based, applied to the insured party’s emissions, with a data quality score attached. They are reported separately from the insurer’s financed emissions.
For commercial lines, the attribution factor is the insurance premium divided by the insured party’s revenue. For personal motor, it is the premium divided by the total cost of vehicle ownership. The factor is then applied to the insured party’s emissions. For example, a £2m premium against £400m revenue gives a 0.5% factor, attributing 250 tCO₂e from a 50,000 tCO₂e insured company.
Premium is observed, audited, reported annually, and maps cleanly to a reporting year. Insured exposure — sum insured or policy limit — is inconsistently defined across lines of business and prone to gaming. Premium also aligns the attributed emissions with the period of cover, making them an annual flow rather than a point-in-time balance.
No. Insurance-associated emissions come from the underwriting book (Part C). An insurer’s investment portfolio produces financed emissions (Part A), like any asset owner, using the financed-emissions attribution factor built on EVIC or outstanding amount. The two exposures are reported separately and never summed.
Every PCAF figure carries a data quality score from 1 to 5. Score 1 reflects verified, asset-specific data; Score 5 reflects highly estimated data, such as sector-average emission intensity applied to revenue. The score travels with the attributed number into the portfolio total so readers can judge the reliability of the figure alongside the figure itself.
The first edition (2022) covers commercial lines and personal motor. Other lines — property, liability, and most treaty reinsurance — are not yet methodologically resolved and are flagged for future editions. Reporters disclosing today scope their underwriting figure to the lines the standard covers and note the exclusions.