ASX-listed global insurer QBE is facing a shareholder resolution urging it to stop underwriting and investing in fossil fuels in line with its commitment to help keep global warming below 1.5 degrees.
The call came after another year of high catastrophe costs, with QBE reporting a significant spike in the net cost of catastrophe claims for its Australia Pacific business to US$193 million, or 5.4% of net earned premium compared with $106 million, or 2.8%, in the prior year. The figures do not include claims from bushfires and hailstorms in January and floods in February.
The shareholder resolution also coincides with the industry giant’s recognition that climate change poses a material threat to its business, with “vast swathes of Australia” seeing increasing risk that could potentially make insurance out of reach for many homeowners and businesses.
Market Forces said that despite announcing that it will phase out its thermal exposure by 2030, the insurer continues to underwrite and invest in oil and gas projects, including highly polluting tar sands and unconventional gas, which are fuelling more extreme weather events.
“The greatest carbon threats in Australia are in the rapidly expanding LNG and unconventional gas industries, and the science is clear that these dirty industries need to shrink rapidly if we are to keep global warming below 1.5 degrees,” said Pablo Brait, Market Forces campaigner. “QBE can’t be taken seriously on climate unless it phases out its support for all fossil fuels. In its annual report, QBE states that it ‘continues to support the objectives of the Paris Agreement.’ Unless QBE commits to ending its underwriting and investment in all fossil fuels, then in reality, it is undermining this agreement.”
Brait said the impacts of climate change threaten the insurance industry’s very existence.
“Profits are being smashed and premiums are becoming unaffordable across vast swathes of Australia,” Brait said. “It makes no sense for QBE to be underwriting the industries most responsible for fuelling natural disasters. It’s not only unethical but bad for business. Shareholders are asking QBE to act in their interest and phase-out oil and gas exposure.”