As climate-related disasters increase in frequency and severity, Canada’s insurance industry faces growing scrutiny for its dual role in managing climate impacts while contributing to the crisis.
Fairfax Financial Holdings, a leading global property and casualty insurer, is at the center of criticisms due to its substantial investments in fossil fuels and a lack of climate-aligned policies.
According to a review by Investors for Paris Compliance, Fairfax’s fuel investments amounted to over $1.5 billion in 2023. These investments include stakes in major oil and gas companies like Occidental Petroleum and EXCO Resources.
In 2024, insurance payouts for extreme weather in Canada reached a record $7.7 billion, doubling the previous year’s total, according to a report from Investors for Paris Compliance, a shareholder advocacy group.
The report said this surge in claims, driven by flooding, wildfires, and hailstorms, has led to soaring premiums for Canadian homeowners, with rates rising nearly 350% over two decades.
“Globally, major insurance companies like Allianz, Zurich, Munich Re, Suncorp, Generali, and others are aligning themselves with net-zero emissions targets by halting the underwriting of fossil fuel expansion. Yet no Canadian insurer has made such a commitment, and few have even published plans to achieve net-zero,” wrote Kiera Taylor, senior analyst with Investors for Paris, in a blog post.
“Governments must intervene to ensure that the insurance industry cleans up its act, particularly if they are being asked for help.”
Fairfax ranks as the world’s fifth-largest underwriter of fossil fuels and is one of the least climate-aligned insurers globally, Investors for Paris Compliance highlighted.
The group claimed that Fairfax has no net-zero commitments, policies for reducing financed emissions, or strategies to phase out fossil fuel investments. Advocates highlighted that despite recognizing the impact of rising climate-related losses, Fairfax has not implemented measures to align its operations with global climate goals.
Fairfax’s leadership, under founder and chairman Prem Watsa, highlighted in a statement that “understanding climate change is not only critical to managing risks at a Fairfax level but also the opportunities arising from them,” emphasizing that climate change is a priority for risk management.
However, climate advocates noted that the company’s lack of concrete action exposes it to both financial and reputational risks as governments and markets increasingly prioritize climate resilience.
Investors for Paris Compliance have urged Fairfax to reform its approach. Its recommendations include setting net-zero targets, disclosing emissions data, and introducing fossil fuel exclusion policies.
They also called for actions to create a national flood insurance program and to make taxpayer assistance contingent on insurers adopting climate-responsible practices.
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