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Insuring Coal No More

The Unfriend Coal campaign calls on insurance companies to stop underwriting and investing in climate-destroying coal projects. This monthly newsletter shares campaign highlights on climate, coal, and the insurance industry.

Campaigners call on reinsurers to exit coal in Monte Carlo

With a protest and a new briefing paper at the Rendez-Vous de Septembre, the reinsurance trade show in Monte Carlo, Unfriend Coal campaigners earlier this week called on reinsurers to exit the coal sector. Because the number of reinsurers in the coal market is so small, “it would only need the withdrawal of the biggest among them to challenge the expansion of the coal sector and hasten its phase-out,” the briefing states.

After Munich Re announced on August 6 that it would limit its underwriting support for new coal projects, companies controlling 32% of the reinsurance market have restricted their services to the coal industry. Yet their policies contain significant loopholes and don’t match the safeguards of leading direct insurers. No carrier has so far taken meaningful steps to make treaty reinsurance coal-free, and major actors like Hannover Re and Berkshire Hathaway continue to underwrite coal without any limits.

In a comment on Swiss Re’s coal exit policy, Dan McGarvey, a managing director at Marsh, meanwhile remarked that “the elimination of coal power isn’t just good for the environment… it’s quickly becoming good for the corporate bottom line”.

Video-Eiris scolds lack of insurance progress on climate

In a report published in August, the consultancy Vigeo Eiris came to sobering conclusions regarding insurers’ performance on environmental, social and governance criteria. Overall, the report ranks the sector’s ESG performance 23rd out of 39 sectors. With a score of 22/100, insurers performed particularly poorly “on the topic of integrating climate-related risks into its underwriting and investment activities”.

With a focus on coal, Vigeo-Eiris notes that “the insurance industry has the chance to distance companies from one of the worst activities in terms of impact on climate: burning coal”. The report finds that 23% of 159 insurance companies covered have committed to divest from coal and highlights the measures by AXA, Swiss Re and others to stop underwriting coal.

Insure Our Future campaign launched in the US 

At an event at the Global Climate Action Summit (GCAS) featuring California Insurance Commissioner Dave Jones, industry and NGO voices, U.S. climate and consumer groups launched the Insure Our Future campaign as part of the international Unfriend Coal campaign. The campaigners noted that even as unprecedented wildfires ravage California and other parts of the world, no major U.S. insurer has committed to divest from or stop underwriting coal and tar sands projects. Most insurers have so far completely ignored the demands which 17 leading U.S. NGOs presented to them in a letter on July 13.

“I would advise our US peers to take their decisions before they are being targeted by NGO campaigns”, AXA’s Sylvain Vanston said at the GCAS event. Time for this is quickly running out.

In a resolution, the San Francisco city council in late July called on insurers to exit the coal and tar sands sectors and urged the city to “cut ties with any insurance company that continues to insure dirty energy projects”. The Insure Our Future campaign is working with other municipal and corporate insurance customers to encourage a shift to coal-free insurance carriers.

Lemonade sets example for U.S. insurers 

Insurtech start-up Lemonade is currently giving established home insurers a run for their money. On September 12 Lemonade announced that it does not hold any fossil fuel investments and intends to continue this policy. In a blog post, the company’s CEO Daniel Schreiber pointed out that when it comes to climate change, “doing the right thing benefits our customers and our shareholders and our future”.

Lemonade also asked other U.S. insurers to follow suit. “We’re calling on our industry - our reinsurance partners, our competitors, and our colleagues in health and life insurance companies - to join us”, Schreiber wrote. “For insurance companies in the business of underwriting polluting projects we have a simple ask: please don’t.”

Japanese life insurers decline finance for Australia's Carmichael coal mine

As reported last month, Nippon and Dai-ichi Life, the two biggest Japanese life insurers, will stop offering finance for coal projects. In line with these commitments, both companies disclosed in August that they had declined a request to fund the proposed multi-billion dollar Carmichael coal mine project in Australia.

Australian campaign targets QBE

Australian insurer QBE continues to act as a major coal underwriter particularly in Asia. After a shareholder resolution at the company’s 2018 AGM requesting full climate risk disclosure received more than 18% of the votes, Market Forces is now encouraging customers to ask QBE to exit the coal sector directly. Retail customers are telling the company that they “will not be considering QBE for my insurance needs until these commitments are made”. QBE has announced reviews of their investment strategy by the end of 2018, and of their underwriting strategy by the end of 2019.

Project alert: Ostroleka C

If built, Ostroleka C, a proposed 1000 MW coal plant in Poland, would run until 2063, 33 years beyond the timeline by which industrialized countries need to phase out coal projects. In a report, Carbon Tracker has demonstrated that if built, the project will not be economic. Even so ENEA, a state-owned utility, has asked shareholders to approve the project at a meeting on September 24. In letter Unfriend Coal groups have called on insurers not to underwrite the project, and plan to shame any companies which get involved at COP24 and beyond.

Event: Insurance & Climate Risk Americas, New York, September 24

Organized by InsuranceERM and Environmental Finance, this conference features Insurance Commissioners Dave Jones and Mike Kreidler as well as speakers from Governor Cuomo’s office, Allianz, Aviva, Axis Capital, Munich Re, Swiss Re, Ceres, the Unfriend Coal campaign and many others. Full program and registration here.

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Got a news story or campaign action you want us to share? Email Peter Bosshard and we’ll look at including it in our next newsletter. 

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