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U.S. Insurers Fail on Climate Action

Detailed U.S. media briefing here

Interactive report site here

Global insurers make coal increasingly “uninsurable”; whole industry fails to act on oil & gas

LONDON (December 2, 2020)—U.S. insurance companies lag behind their global peers and play a key role in enabling the fossil fuel industry, the Insure Our Future campaign revealed today in its fourth annual scorecard on insurers’ climate policies.

Insuring Our Future: The 2020 Scorecard on Insurance, Fossil Fuels and Climate Change finds that most European and Australian insurers no longer provide coverage for new coal projects, which has made it harder and costlier to secure the insurance that coal projects need to operate. Coal companies face rate increases of up to 40%. Controversial projects—like the Adani Group’s Carmichael coal mine in Australia—are finding it hard to obtain insurance at all. This demonstrates the insurance industry’s unique power to accelerate the shift away from fossil fuels.

Since the Insure Our Future campaign launched in 2017, at least 23 companies have ended or limited their coverage for coal projects, representing nearly half the global reinsurance market. Global insurers are also shifting capital away from coal: the combined assets of insurers committed to divestment or to no new coal investments increased from $4 trillion in 2017 to $12 trillion in 2020—around 40% of the industry’s total assets.

Yet while six U.S. insurers have adopted policies on coal, most are riddled with loopholes. All 10 U.S. insurers assessed in the report received negative scores on “climate leadership” for supporting lobby groups who oppose climate efforts. The scorecard—which is published by 17 organizations from nine countries—ranks 30 companies in total based on survey responses and public information. The report will be launched today at the Insurance, Risk and Capital EMEA conference in London.

“U.S. insurers like AIG, Liberty Mutual, and Travelers are providing a lifeline to the struggling coal industry and underpinning the expansion of oil and gas infrastructure that the climate cannot afford,” said Ginger Cassady, Executive Director of Rainforest Action Network. “While leading global peers are exiting the coal sector and taking steps to restrict oil and gas business, the U.S. industry is continuing to pour fuel on the flames of the climate crisis.”

“The insurance industry is the single most annoying part of this whole climate puzzle: they possess all the data about what global warming is doing to our earth, and yet they keep underwriting the industry that drives the damage. If they stay involved with coal and oil and gas, then the only thing they truly insure is our destruction,” added Bill McKibben, co-founder of 350.org and leader in the global divestment movement.

Along with U.S. insurers, East Asian insurers and the Lloyd’s market are also still insuring coal expansion. The UN’s Intergovernmental Panel on Climate Change has warned that building any new fossil fuel project is incompatible with keeping global warming below 1.5°C, which avoids the most catastrophic impacts of climate change. Yet as of July 2020, more than 737 gigawatts of new coal power are planned or under construction worldwide, the equivalent of 368 Hoover Dams.

“Insurers’ continuing shift away from fossil fuels is positive, but in the face of a worsening climate crisis it needs to accelerate. Laggards like Lloyd’s, AIG, and Tokio Marine must stop insuring coal now, and all insurers need to phase out support for the oil and gas industry,” said Peter Bosshard, coordinator of the global Insure Our Future campaign.

Shrinking coal market points to future for oil and gas 

For the first time, the scorecard evaluates insurers’ oil and gas commitments. It finds that the industry has failed to take comprehensive action: nine insurers have limited or ended cover for tar sands oil, but Australia’s Suncorp is the first and only insurer to announce a phaseout of all oil and gas coverage. Not a single U.S. insurer has a policy on oil and gas expansion.

The shrinking coal market demonstrates the impact insurers can have on fossil fuel development, and the highly concentrated oil and gas insurance sector is vulnerable. Ten insurers cover about 70% of the global oil and gas market; U.S. insurers have the largest underwriting market share.

U.S. insurers at the back of the pack

 Following the examples set by Chubb and AXIS Capital, Liberty Mutual and The Hartford adopted coal policies in the last 12 months, but these policies are significantly weaker than those of the leading European companies. Liberty Mutual, for example, does not rule out insuring new projects, and is still trying to build its own coal mine in Australia.

AIG remains one of the biggest insurers to have no coal policy whatsoever. It continues to provide coal insurance despite the fact that coal accounted for less than 1% of AIG’s 2019 premiums. Connecticut insurers W.R. Berkley and Travelers are also among the few insurers examined in the report that have no restrictions on coal underwriting.

Overall, the report concludes that the industry is failing on climate. All 10 U.S. insurers support lobbying activities to thwart climate action. Liberty Mutual, for example, has been identified as a top sponsor of Fox News’ dangerous coronavirus and climate coverage.

Overall findings include:

  • Underwriting: AXA and Swiss Re are the leaders in ending fossil fuel insurance, followed by Hannover Re, Zurich, and Munich Re. All but Hannover Re restrict underwriting tar sands oil as well as coal. AIG, Berkshire Hathaway, Lloyd’s, Sinosure, Travelers, and W.R. Berkley underwrite coal without restriction.
  • Divestment: SCOR and AXA lead on divestment followed by Swiss Re, Allianz, and Zurich. All but Allianz cover tar sands as well as coal. Sixteen other insurance companies assessed in this report have less comprehensive coal divestment policies, and only nine continue to invest in the coal sector.
  • Climate leadership: Legal & General achieved the highest score for other climate leadership —which focuses on insurers’ commitments to align with a 1.5°C pathway. Aviva, Zurich, Munich Re, QBE, and AXA also score well. Thirteen insurers, including all 10 U.S. companies, received negative scores for supporting lobby groups that oppose climate efforts.

Case studies: Adani and Trans Mountain

To date, 27 international insurers have publicly distanced themselves from the Adani Group’s Carmichael coal mine in Australia. The mine would produce 4.6 billion tonnes of carbon dioxide over its lifetime—equivalent to the annual emissions of almost 100 million passenger vehicles. The project is struggling to secure insurance, and more than a year after receiving final permits, construction is proceeding very slowly.

The financial backers of the Trans Mountain tar sands pipeline expansion—which would triple the pipeline’s capacity to bring oil from what National Geographic calls the “world’s most destructive oil operation—have also been in the spotlight. Trans Mountain has lost several insurers as a result of pressure from Indigenous and environmental groups, including lead insurer Zurich, HDI Global, and Munich Re. But U.S. insurers Liberty Mutual, AIG, Chubb, and W.R. Berkely, along with Lloyd’s, appear to still be providing insurance, and construction is moving forward on the pipeline.

Growing pressure—and incentive—for insurance companies to act on climate crisis

In an industry first, 60 businesses recently called on U.S. insurers to drop fossil fuels. In April, New York City Comptroller Scott Stringer, writing on behalf of three city pension funds holding $155 billion of assets, called on AIG, Liberty Mutual, and Berkshire Hathaway to stop insuring coal projects and divest from the industry. And U.S. Congresswoman Ayanna Pressley—the representative for Liberty Mutual’s district—recently slammed the company for supporting fossil fuels.

Insurers are also waking up to the financial incentives. Natural disasters caused a record $3 trillion of losses over the last decade—$1.2 trillion higher than in 2000-2009—and cost insurers $845 billion. Fossil fuels are also a poor investment: in the past decade, U.S. oil and gas companies lost 43% of their value, and coal a staggering 98%. The COVID-19 pandemic accelerated losses and put more projects at risk of becoming “stranded assets.” By contrast, wind and solar have seen rapid growth. It is cheaper to generate energy from new renewables than from new coal plants in all major markets.


Insure Our Future in the U.S. is a campaign comprising environmental, consumer protection, and grassroots organizations holding the U.S. insurance industry accountable for its role in the climate crisis. We are part of the global Insure Our Future campaign, which promotes a rapid shift of the insurance industry away from supporting and financing fossil fuels to accelerating the transition to a clean energy economy.

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