Report finds US insurers providing lifeline to coal as European insurers exit sector
U.S. insurance companies are enabling the construction of new coal-fired power plants around the world, undermining efforts to avoid dangerous climate change finds our new report, Insuring Coal No More.
Over the past year, international insurance companies have taken unprecedented action against the coal industry, ending insurance for coal companies, mines and power plants and excluding coal from more than $6 trillion of investments. But it’s a different story in the United States, where no major insurer has ended insurance for or investments in the coal industry.
With European insurers exiting the coal sector, the report finds U.S. insurers have an outsized role in deciding how quickly the world transitions away from coal. Without insurance, most new coal projects could not be financed and built, and most existing coal facilities would have to close. With 1,380 new coal-fired power plants in the pipeline globally, the U.S. insurance industry is key in how quickly we shift from coal to cleaner energy sources.
Scorecard: See who is taking action on coal
The scorecard ranks 24 of the world’s biggest insurers on their action on coal and climate change, assessing and scoring their policies on underwriting, divestment and other aspects of climate leadership. It is based on responses to a questionnaire from 18 companies, including all European and Asia-Pacific insurers surveyed, and on publicly available information (click here for the detailed methodology used in the report and here for the sources used).
Pressure grows on United States to follow Europe’s lead
Among the report’s key findings:
Europe’s four biggest primary insurers have now restricted insurance for coal. Allianz and Generali limited underwriting and AXA tightened its policy this year, while Zurich announced restrictions in November 2017.
One third of the reinsurance market has now restricted cover for coal. Reinsurance giants Swiss Re and Munich Re announced underwriting restrictions this year, going beyond those already announced by SCOR.
At least 19 major insurers with more than $6 trillion in assets, 20% of the industry’s global assets, have divested from coal, up from $4 trillion and 13% a year ago. Generali, Lloyd’s, Hannover Re, AG2R La Mondiale and Groupama announced new divestment policies this year while AXA, Allianz and Munich Re strengthened their policies.
In the United States, by contrast, none of the nine leading insurers assessed have taken action on coal. Companies like AIG, Chubb, Liberty Mutual and Berkshire Hathaway continue to underwrite and invest in the industry. The Insure Our Future campaign is putting pressure on the US laggards to join the international trend and ditch coal.