A report has found that while the number of insurance companies that have withdrawn support for coal has more than doubled in 2019, the US insurance industry is still trying to catch up with its European counterparts.
The report, “Insuring Coal No More,” is the third annual scorecard by the Unfriend Coal campaign. According to the report, at least 35 insurance companies with combined assets of about US$8.9 trillion (37% of the industry’s global assets) have now adopted coal divestment policies – up from 15 companies with US$4 trillion assets under management in 2017, and 19 with US$6 trillion in 2018.
“Insuring Coal No More” also ranks 30 leading insurers on their action on coal and climate change. Each of the insurers is scored based on its policies on underwriting, divestment, and other aspects of climate leadership.
Seventeen (17) of the world’s biggest insurers have announced coal exit policies; these insurers together control 46% of the global reinsurance market and 9.5% of the primary insurance market, and most of them refuse to insure new mines and power plants. The top companies which scored highest in the report, like Swiss Re and Zurich, also ended coverage for existing coal projects and the companies that operate them, while adopting similar policies for tar sands.
This year saw the first climate policies announced by US insurers, with Chubb revealing its coal policy and AXIS Capital announcing a coal and tar sands policy. But the US insurance industry still has a lot of catching up to do, the report found. Some of the biggest insurers in America – namely Liberty Mutual, AIG, and Berkshire Hathaway – have made no progress on climate change, and rank at the bottom of the report card, it said.
The report noted that seven of the 10 lowest ranking companies are based in the US, while European firms comprise seven of the top 10 ranked companies on the list.
“The role of insurers is to manage society’s risks. It is their duty and in their own interest to help avoid climate breakdown. The industry’s retreat from coal is gathering pace as public pressure on the fossil fuel industry and its supporters grows,” commented Peter Bosshard, coordinator of the Unfriend Coal campaign and author of the report.
Bosshard, however, called out major US and Asian insurers for continuing to undermine international climate targets by insuring and investing in coal projects.
“As global actors, US insurance companies have a huge role to play in curbing the worst impacts of climate change. We are encouraged by initial leadership this year from Chubb and AXIS Capital, but the US industry is still so far behind Europe,” said Rainforest Action Network executive director Lindsey Allen.
Allen added that the industry is now focusing its attention on Liberty Mutual, which is “abandoning its long-time clients in the midst of ever-increasing climate-related disasters, while simultaneously insuring fossil fuel companies that drive these crises.
“The company’s hypocrisy is shocking,” it said.
