The number of insurers withdrawing cover for coal projects more than doubled this year and for the first time U.S. companies have taken action, leaving Lloyd’s and Asian insurers as the “last resort” for fossil fuels, according to a new report.
The report, which rates the world’s 35 biggest insurers on their actions on fossil fuels, declares that coal – the biggest single contributor to climate change – “is on the way to becoming uninsurable” as most coal projects cannot be financed, built or operated without insurance.
Ten firms moved to restrict the insurance cover they offer to companies that build or operate coal power plants in 2019, taking the global total to 17, said the Unfriend Coal campaign, which includes 13 environmental groups such as Greenpeace, Client Earth and Urgewald, a German NGO. The report will be launched at an insurance and climate risk conference in London on Monday, as the UN climate summit gets underway in Madrid.
The first insurers to exit coal policies were all European, but since March, two U.S. insurers – Chubb and Axis Capital – and the Australian firms QBE and Suncorp have pledged to stop or restrict insurance for coal projects.
At least 35 insurers with combined assets of $8.9 trillion, equivalent to 37% of the insurance industry’s global assets, have begun pulling out of coal investments. A year ago, 19 insurers holding more than $6tn in assets were divesting from fossil fuels.
Lloyd’s, the world’s biggest insurance market, is the only major European firm which continues to insure new coal projects. Lloyd’s started excluding coal from its investments in its own £4bn central mutual fund in April 2018. However, its chief executive John Neal last month ruled out issuing guidelines on underwriting coal projects to its member syndicates.