Making the announcement via a guest article in German newspaper Frankfurter Allgemeine Zeitung, chief executive Joachim Wenning said the world’s largest reinsurer will be limiting its coal involvement, both in terms of investments and insurance coverage, in line with the climate target set by the Paris Agreement.
“In the individual risk business, where we can see exactly the risks, we will in principle no longer insure new coal-fired power plants or mines in industrialised countries,” said Wenning.
According to a report by German news agency dpa, “in principle” means there will be case-by-case considerations to allow for exemptions. As for shares and bonds, Munich Re will stop investing in firms that generate more than 30% of their revenues from coal business.
For campaigners though, zero support for coal is the only way to go.
“After massive public pressure and huge payouts for climate disasters, Munich Re has done the right thing in beginning to dump coal,” said Avaaz campaign director Bert Wander in a statement sent to Insurance Business. “It’s a good start, but Munich Re will still invest in and insure some coal projects, and the only way to avoid climate catastrophe is to abandon coal completely.”
An Avaaz campaign calling on Munich Re to stop insuring coal and tar sands has been signed by more than 850,000 people.
In June, fellow German reinsurer Hannover Re said it was divesting from companies that have over 25% of annual revenues coming from coal. It will, however, continue to reinsure coal power plants for now.
As for Swiss Re, it has started to implement a group-wide policy that stops it from providing coverage to both existing and new coal mines and power plants owned by businesses with more than 30% coal exposure. The policy matches the reinsurer’s existing practice – now more than two years old – when it comes to investments.
Last month energy campaigner Regine Richter, of environmental organisation Urgewald, stated: “As the first insurer to warn against the dangers of climate change, Munich Re is now lagging massively behind its peers.
“The fact that direct competitors such as Swiss Re and, to a certain extent, Hannover Re are now leading the way on coal should be an incentive for Munich Re to follow suit.”
Urgewald supports the Unfriend Coal campaign, which has been pressuring insurance companies to get out of the coal business and instead back the transition to clean energy.