The insurance industry remains under pressure to stop supporting coal, an industry which environmental groups say undermines international efforts to combat climate change and air pollution, and even causes “thousands” of premature deaths each year.
Earlier this month, the Unfriend Coal campaign published a report revealing that European insurers have invested more than €1.3 billion (around £1.14 billion) in Polish coal companies and have signed at least 21 contracts underwriting existing operations and new developments since 2013. The report called out five insurers that it said are the biggest underwriters of Polish coal: Munich Re’s Ergo Hestia, Allianz, Generali, Talanx’s subsidiary Tuir Warta, and PZU.
A number of insurers have since revealed new plans and initiatives that they say are addressing the issue, but have they gone far enough?
Generali’s board of directors approved a climate change plan that it said will see the company gradually distance itself from coal investments. The Italian insurer said it would no longer make any new investments in businesses associated with the coal sector and revealed plans to divest approximately €2 billion (around £1.76 billion) from its current coal sector exposure by gradually disposing equity investments and eliminating bond investments.
The company said it would also increase its investments in so-called green sectors by €3.5 billion (around £3.09 billion) primarily through green bonds and green infrastructures.
However, the Unfriend Coal campaign criticised the move, saying that it makes no sense to divest from coal but keep insuring coal projects, and said it would maintain pressure on the company.
“Generali’s failure to act on underwriting is unacceptable,” said campaign coordinator Lucie Pinson. “What it calls ‘minimal underwriting support’ for coal leads to thousands of premature deaths each year and increases the risk of runaway climate change.”
Meanwhile, Allianz responded to the initial report by announcing that it had created a working group to examine the issue surrounding coal and coverage – pressing on with its current involvement in the coal industry until a decision is reached.
“The most important point for us is various countries have an energy need that needs to be fulfilled. They need to be insured,” Allianz board member Guenther Thallinger was quoted as saying. “We believe that with dialogue with various companies over time we can hopefully work down to a much lower level of coal.”
That move too was criticised by environmental NGO Urgewald, part of the Unfriend Coal campaign, which said that “just dialoguing” will do little in terms of climate protection.
One firm’s policies have been praised, though. In its criticism of Allianz’s policies, NGO Urgewald highlighted AXA as one of the insurance industry’s “climate change pioneers.”
AXA was one of the first major financial firms to begin selling off coal investments in 2015, beginning with an initial €500 million (around £441 million) divestment. In December 2017, the firm announced it would also stop insuring three major oil pipelines, and would quadruple its divestment from coal businesses.
AXA’s UK CEO Amanda Blanc told Insurance Business last week that green initiatives remain “exceptionally important” to the company.
“I think we were very early in recognising the importance of climate change and that something needed to happen about that, and we made firm commitments around divestments in coal and various other things to show that we were serious about it,” Blanc said.
Overall though, the pressure continues to mount on the industry. This week, UK-based environmental law group ClientEarth was reported as having written directly to Lloyd’s of London chief executive Inga Beale, urging her to put in place measures to get Lloyd’s members off coal for good.