With Hannover Re the latest to restrict investment in coal, now nearly half of the global reinsurance market has divested from “the biggest single source” of carbon emissions.
That is according to the Unfriend Coal campaign and supporter NGO Urgewald, which have been calling on the insurance industry to turn its back on coal not only when it comes to coverage but also in terms of investments. The groups cited the reinsurance giant as having set a tight threshold by divesting from firms that have more than 25% of annual revenues coming from the fossil fuel.
For now though Hannover Re will continue to reinsure coal power plants, telling the Unfriend Coal campaign that while it would “welcome a shift in the energy mix towards alternative energy sources,” it is not in the position, “as a private company, to act contrary to the decisions of sovereign nations” as to what projects to build.
“Hannover Re’s divestment from coal is a welcome first step,” commented Urgewald’s Regine Richter, finance campaigner at the environment and human rights NGO. “The company’s 25% threshold for defining coal companies is stricter than the definition of its peers, even though it misses out additional exclusion criteria such as the development of new coal projects.”
Citing 2016 figures from A.M. Best, the Unfriend Coal campaign said Hannover Re – with its 6.7% share of all premiums during the year – was the world’s third-largest reinsurer in 2016 and joins the likes of Swiss Re, Munich Re, SCOR, Lloyd’s, Generali, and the Markel Corporation on the list of companies which have divested, either partially or in full, from coal. Collectively, the firms controlled 45% of 2016’s $257.5 billion global reinsurance premiums.
“With close to half the global reinsurance market divesting from coal, the world’s ultimate underwriters of risk clearly see no future for a fuel which is the biggest single source of carbon emissions,” said Peter Bosshard, coordinator of the Unfriend Coal campaign. “This sends a strong message to the governments, investors, and financiers that decide on the future of the global energy sector.”
However, in terms of underwriting, both Richter and Bosshard reiterated the need for Hannover Re and others to stop insuring coal projects.