Businesses Call on U.S. Insurers to Ditch Fossil Fuel Underwriting

A group of about 60 American businesses on Thursday urged their insurers to stop providing coverage to and investing in fossil fuel producers.

Source: Reuters | Published on September 18, 2020

Open pit mine. Aerial view of extractive industry for coal. Top view. Photo captured with drone.

In a letter, companies including outdoor-gear producer Patagonia and ice-cream maker Ben & Jerry’s, a unit of Unilever, called on U.S. insurers to drop ties to coal, oil and gas.

“The insurance industry is underwriting and investing in fossil fuels which we now know are the key drivers of climate change,” they said. “As insurance customers, we are therefore expressing our desire for insurance coverage in the U.S. market that isn’t tied to supporting fossil fuels and actively supports renewable energy.”

U.S. insurers reported almost $7 trillion in cash and invested assets according to the National Association of Insurance Commissioners, which did not break that down by sector.

Insurers highlighted in the letter include American International Group Inc, Liberty Mutual, Chubb Ltd, Axis Capital and Hartford Financial Services .

According to the letter, Chubb, Axis Capital, Hartford, and Liberty Mutual have policies to scale back but not halt underwriting of fossil fuels.

In recent years, environmental activists have pressured banks to drop financing for fossil-fuel companies, and called on the finance industry to stop investing in them.

Lobby groups such as Unfriend Coal have also put pressure on insurers to stop underwriting carbon-intensive fuels like coal and oil sands.

Insurance companies can accelerate a transition to a low-carbon economy because having insurance is typically a condition for loans and investment.

The first 10 insurers to exit the coal sector were European, but since March 2019, two U.S. insurers - Chubb and Axis Capital - and two Australian coal insurers have also adopted coal exit policies, according to Unfriend Coal.

Swiss Re AG and Zurich Insurance are the leaders in ending coal insurance, the lobby group said.