European insurance firms still underwriting coal projects, Profundo report finds; NGOs call for policy change

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23 May 2017

Civil society calls on insurance companies to stop "underwriting climate chaos"

Author: Friends of the Earth France, Greenpeace Switzerland, Market Forces, Re:Common, Sierra Club, The Sunrise Project & Urgewald, on Unfriendcoal

Burning coal is the biggest contributor to climate change. If the goals of the Paris Agreement are to be met, no new coal power plants can be built and existing plants must be retired over the coming decades. Insurance companies are supposed to protect us from catastrophic risk. Some of them have warned about climate change for more than 25 years. And yet, many of the same companies continue to underwrite new coal projects and invest billions of dollars in coal and other fossil fuel companies to this day. In spite of their rhetoric insurers directly contribute to climate change. As this briefing paper is about to be published, AXA, the world’s largest insurer, has announced that it will no longer offer insurance services to companies that generate more than half of their revenues from coal. This is an important precedent which shows that progress is possible. Other insurers now need to follow suit. This briefing paper presents facts and figures on insurance companies and climate change, and calls on the sector to come clean on coal.

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17 May 2017

Commentary: It's time for insurance companies to unfriend coal

Author: Peter Bosshard, The Actuary

Walk the walk on climate change, 11 May 2017

Insurance companies are responding to climate change in very different ways…It would however be shortsighted for insurers to see global warming foremost as a business opportunity. Standards & Poor's has warned that climate change may "lead to a sudden increase in the risk and volatility of weather losses if certain tipping points are reached” … Some insurers are offering premium incentives for low-carbon technologies…A new report by Profundo finds that the insurance industry has not yet aligned itself with the goals of the Paris Agreement. According to the research firm, 15 leading European insurance and reinsurance companies have invested at least $131 billion in coal and other fossil fuel companies…In recent years, a rapidly growing list of investors has decided to divest from coal and other fossil fuel companies….The list includes seven insurance companies - Aegon, Allianz, Aviva, AXA, HCF, SCOR and Storebrand - which have agreed to divest from the coal sector…Last month AXA…announced that it would no longer offer property and casualty insurance to the coal companies from which it had divested….will Allianz, Generali, Swiss Re or Munich Re be next to unfriend coal? By making coal projects uninsurable, they could make a major contribution to the climate goals of the Paris Agreement…


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5 May 2017

AXA Investment Managers divests 165 million euros from coal companies

Author: Joslyn Chittilapally, Lifegate

AXA Investment Managers, a France-based investment service provider, has pledged to divest 165 million euros…as a result of its new coal policy. It announced that it won’t invest in companies that derive more than 50 per cent of their revenue from coal-related activities...The policy is AXA IM’s latest move towards responsible investment – it has already implemented policies of divestment from palm oil, controversial weapons, tobacco and soft commodities derivatives…“AXA IM has been committed to responsible investment for nearly 20 years. In taking the decision to divest from coal, we have put our clients’ long term needs and goals at the heart of our thinking …We believe that following COP21, the ratification of the Paris Agreement and growing momentum for fossil fuel divestment globally, now is the right time for AXA IM to make this move sending a strong message to the rest of our industry” (Matt Christensen, Global Head of Responsible Investment, AXA IM)…While there are widespread fears that investors who pull out of carbon-intensive industries prematurely could miss out on future returns, many academics and investment experts argue that delaying divestment could lead to large losses…

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3 May 2017

Full Profundo Report: The involvement of European insurance groups in the fossil fuels sector

Author: Profundo

Insurance groups need to play a vital role in meeting the aims of The Paris Agreement…In their investment decisions and insurance underwriting activities, insurance groups should contribute to…the energy transition from an economy based on fossil fuels towards an economy using renewable energy sources. Besides their role as corporate citizens, insurers also have self-interests in addressing climate change. First, there is the risk of an increase in insurance claims due to damage costs of extreme weather. Second, as investors…insurance groups face reputation risks and the risk of investments in ‘stranded assets’, if they continue investments in fossil fuels instead of allocating investments in an energy transition towards the use of renewable energy. And third, insurance groups face claims on third-party liability insurance in case their clients have failed to mitigate risks to the climate, failed to account for the damage they cause to the environment or failed to comply with regulations...The objective of this research was to map the involvement of the top-12 European insurance groups and top-6 European reinsurance groups in the fossil fuels sector…

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