Seven major insurance groups have been targeted by the United States Senate Committee on the Budget, which has launched an inquiry into how the industry supports the expansion of fossil fuel programmes.

In letters sent to AIG, Berkshire Hathaway, Chubb, Liberty Mutual, Starr, State Farm and Travelers, senators pressed the companies for specific disclosures, the committee chairman’s press office has said.

The committee raised alarm that US insurers were limiting coverage, or vacating markets entirely, due to their assessments of the likelihood of coming “catastrophic risk” caused by climate change.

They say despite evidence that new and expanded oil, coal and gas development is incompatible with global climate goals and long-term economic stability, the US insurance industry is continuing to support fossil fuel expansion: “US insurers have approximately $582 billion invested in fossil fuels, including nearly $90 billion in coal alone.”

The committee wants to know why and how the insurers are still supporting the underwriting of, and investment in, new and expanded fossil fuel projects; what plans they have to follow the example of global insurance counterparts, many of which have begun restricting their underwriting of fossil fuel projects; what plans they have to divest their fossil fuel-related investments; and what methodology they use to evaluate future impact on climate of their investment and underwriting decisions, among other questions.

Sheldon Whitehouse, the chairman of the committee, stated: “Any new fossil fuel expansion is incompatible with our climate goals and economic stability.

“By underwriting and investing in new and expanded fossil fuel projects, US insurers are helping Big Oil bring us closer to the worst runaway climate scenarios, which threaten lives, livelihoods and the federal budget.

“That is why I am launching an investigation to obtain key information and internal documents showing how these companies weigh risks to the climate when considering their underwriting and investment decisions.

“This information is especially relevant as some of these companies begin to pull out of certain markets because they see the coming catastrophic climate risks — despite continuing to provide services to the fossil fuel industry.”

Mr Whitehouse is joined by committee colleagues senators Ron Wyden and Bernie Sanders.

The investigation follows a series of hearings held by the committee that have examined the economic risks associated with climate change.

They also follow seemingly contradictory moves last month from 23 Republican state attorneys-general who wrote to insurers of the Net-Zero Insurance Alliance, expressing doubts about the legality of their pledge to work with other insurers and asset owners to promote a climate agenda.

Raising the issue of whether the alliance initiative complies with antitrust laws, the AGs claimed: “The push to force insurance companies and their clients to rapidly reduce their emissions has led not only to increased insurance costs, but also to high gas prices and higher costs for products and services across the board, resulting in record-breaking inflation and financial hardships for the residents of our states.”

While corporations continually face the need to balance competing interests, the extremely polarising political US environment may create some difficulty for a cohesive climate policy.

On the other side, the Senate Committee on the Budget has told insurers: “Central bankers, economists, insurance industry executives, financial experts and others have testified before the committee that climate change poses multiple ‘systemic risks’ to the economy — risks with the potential to cascade beyond immediately affected sectors to cause economy-wide harm, akin to the 2008 financial crisis.

“Witnesses have warned that sea-level rise and wetter, more intense storms could eventually make more than $1 trillion in coastal real estate uninsurable, and therefore unmortgageable, leading to a coastal property values crash; that more frequent and intense wildfires could result in a similar death spiral for western property in the wildland-urban interface; that climate-related losses are making it harder for the insurance industry to price risk, already resulting in insolvencies among regional insurers; and that, as demand for oil and gas declines, hundreds of billions of dollars in fossil fuel assets may be stranded.”

The committee has sought the requested information by June 16 and documents by June 23 from the seven companies.