Insurers failing to act on oil and gas

Unfriend Coal’s Insure Our Future campaign has revealed its fourth annual scorecard on insurers’ climate policies, and despite progress some major companies in the US, the Lloyd’s Market and East Asia are still insuring coal. Moreover, there are few signs that the global insurance industry is taking comprehensive action on oil and gas.

Most European and Australian insurers no longer provide cover for new coal projects, while others are becoming more cautious and restricting capacity. Coal companies are facing rate increases of up to 40 per cent, according to broker Willis Towers Watson. Controversial projects – like the Adani Group’s planned Carmichael coal mine in Australia – are finding it hard to obtain insurance cover at all.

Since the Insure Our Future campaign launched in 2017, at least 23 companies have ended or limited their cover for coal projects, representing 12.9 per cent of the primary insurance market and 48.3 per cent of the reinsurance market.

Insurers are also divesting from coal: at least 65 insurers with combined investments worth $12tr have either adopted a divestment policy or committed to making no new coal investments. This is up from $4tr in 2017.

However, whilst coal is a clean climate danger, and there is less progress on the commodities of oil and the more debatable gas, considered for the first time in this year’s scorecard. Just nine insurers have limited or ended cover for tar sands oil – up from four last year – and Australia’s Suncorp is the first and only company to announce a phase-out of all oil and gas coverage.

Peter Bosshard, coordinator of the Insure Our Future campaign, noted: “Insurers’ continuing shift away from fossil fuels is positive, but in the face of a worsening climate crisis it needs to accelerate. Laggards like Lloyd’s, AIG and Tokio Marine must stop insuring coal now, and all insurers need to phase out support for the oil and gas industry.”

Last month, Samsung Fire & Marine announced it will stop insuring coal – the first Asian insurer to do so – although details have yet to follow. Japan’s three major insurers - Tokio Marine, Sompo and MS&AD – and China’s Ping An have announced very basic restrictions on underwriting, but they continue to be major insurers of coal.

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