Even as more insurers across the globe back away from coal, many in the US continue to encourage fossil fuel pollution by underwriting the risk involved in oil and gas exploration and production.
At least 65 insurers representing $12-trillion worth in assets have either begun divesting coal assets or committed to not making new coal investments, according to a new report by Insure Our Future, a coalition of 20 climate and consumer protection advocacy groups. While the quality of their commitments varies, that number is a significant increase from the 35 companies and $8.9 trillion of assets in last year’s report.
The group, formerly called Unfriend Coal, publishes an annual ranking of the top 30 insurers that rates their policies regarding coal. This year, it also judged them on their approach to the oil and gas sectors for the first time. The report concluded that most firms don’t have a specific policy on oil and gas, with the US in particular lagging the global industry.
The US companies in the report have the largest underwriting market share in the oil and gas industry, yet none has comprehensive policies limiting oil and gas expansion, according to Insure Our Future. It estimated the size of the oil and gas property and casualty insurance market at $17.3-billion, three times that of coal.
“US insurers like AIG, Liberty Mutual, and Travelers are providing a lifeline to the struggling coal industry and underpinning the expansion of oil and gas infrastructure that the climate cannot afford, “ said Ginger Cassady, executive director of Rainforest Action Network, which is part of the coalition.
In recent years, activists have pressured financial institutions to stop funding the fossil fuel industry—either through direct investments such as stock purchases by mutual funds or through indirect support like insurance underwriting. They are increasingly pressing to end support for future projects as well. For example, after activist pressure, many major banks in the US have ruled out financing for oil and gas exploration in the Arctic.
The scorecard singled out American International Group, Chubb, Hartford Financial Services Group, Liberty Mutual, Travelers and WR Berkley as some of the insurers in the world that continue to support the expansion of the oil and gas supply chain. It cited instances of the companies underwriting projects including exploration for new reserves, oil pipelines and liquified natural gas export terminals.
All 10 US insurers covered in the report received negative scores on “climate leadership” because they hold memberships in industry lobbying groups that the Insure Our Future said “oppose climate efforts.” US insurers routinely lag their European counterparts, who topped the rankings this year with Axa SA and Swiss Re AG leading the pack.
A representative for AIG declined to comment beyond its existing public disclosures on sustainability, while representatives for Travelers and Chubb had no immediate comment. A spokesperson for WR Berkley and Chubb didn't immediately return a message seeking comment.
Matthew Sturdevant, a spokesman for the Hartford, said the company is “one of the few US insurers to establish and publicly disclose a policy limiting our investments in, and underwriting of, coal and tar sands.” Gina Anderson, a Liberty Mutual spokesperson said the company is “taking action to reduce carbon emissions as we support the transition to a low-carbon economy.”