First specialty insurer exits coal and tar sands
On October 16 AXIS Capital adopted a new policy ending insurance for new coal and tar sands projects and companies. AXIS is the second US insurer to exit the coal and the first to exit the tar sands sector, and the 17th insurer to end coal insurance overall.
According to the new policy, AXIS will not provide insurance or facultative reinsurance for new thermal coal or oil sands extraction and pipeline projects and their dedicated infrastructure. It will also end cover for companies generating at least 30% of their revenues from thermal coal mining, producing at least 30% of their power from coal, or holding more than 20% of their reserves in oil sands. Renewals will be considered on a case-by-case basis until January 1, 2023.
The policy is weakened in that it allows exceptions to be “considered on a limited basis until January 1, 2025 in countries where sufficient access to alternative energy sources is not available”. Particularly with a vague term such as “sufficient access” this provision is not in line with the UN Secretary General’s call to build no new coal projects after 2020.
With AXIS Capital, carriers controlling 45% of the non-life reinsurance market have now adopted coal exit policies. Just as importantly AXIS, whose CEO Albert Benchimol sits on the Lloyd’s Council, is the first specialty insurer exiting the coal and tar sands sectors. Its bold step adds pressure on other US insurers and specialty insurers to phase out coal and tar sands.
Elana Sulakshana of Rainforest Action Network (RAN) welcomed the new policy “as a major win for our climate and for Indigenous rights”. In a comment the RAN campaigner added: “AXIS has raised the bar for U.S. insurers by restricting both coal and tar sands insurance. The ball is now in Liberty Mutual and AIG’s court to take responsibility for their role in the climate crisis.”