Campaigners who have sought to pressure the global industry insurance into ending their support for the world's dirtiest energy sources—including coal and tar sands—are cautiously celebrating victory Monday after insurance giant Chubb, specifically citing the climate crisis, announced it will stop underwriting coal mines and no longer offer new policies to businesses that derive more than 30 percent of their revenues from the mining of coal.
"Even though U.S. insurers have known about the risks and impacts of climate change for decades they have continued to insure the fossil fuel projects and companies that are causing the climate crisis. That makes absolutely no sense financially or ethically."
—Ross Hammond, Insure Our Future
With an official announcement and details of the new policy set for Monday, the Financial Times was the first to report the news on Sunday.
"Chubb recognises the reality of climate change and the substantial impact of human activity on our planet," said Chubb's CEO Evan Greenberg.
Joseph Wayland, general counsel for the company, explained that the decision was made for both planetary and business reasons.
"As a global insurer we are impacted by climate change, in everything from increasing fire risk to flooding," Wayland said. "Climate change . . . can be seen in the increasing severity and frequency of natural catastrophes."
According to the FT:
Over the past two years, insurers have been hit by a series of large natural catastrophe claims.
According to Swiss Re, the insurance industry faced $76bn of losses from natural catastrophes in 2018, the fourth highest sum on record.
Not all of the catastrophes can be directly linked to climate change, but modelling specialists say that some of them, such as the series of wildfires that hit California last year, are made more likely by warmer temperatures. Chubb's decision could increase the pressure of other big US insurers such as AIG and Travelers to act.
Though officially headquartered in Switzerland, Chubbs does much of its business in the United States, where it has faced intensifying demands to end insuring planet-killing projects.
In response to the news, Insure Our Future—part of the Unfriend Coal coalition which has worked to convince the U.S. insurance industry to stop insuring and investing in coal and tar sands projects and companies worldwide—said it wanted to see the details of Chubb's plan before making a complete assessment but that it should be seen as "a major step forward," especially if other companies follow suit.
"New coal projects cannot be built without insurance, and Chubb just dealt a blow to the dozens of companies that are still betting on the expansion of coal globally."
—Lindsey Allen, Rainforest Action Network"We are looking forward to seeing Chubb's new coal policy which will be the first by a major U.S. insurance company," said, Ross Hammond, senior strategist for the group. Even though U.S. insurers have known about the risks and impacts of climate change for decades they have continued to insure the fossil fuel projects and companies that are causing the climate crisis. That makes absolutely no sense financially or ethically."
Lindsey Allen, executive director of Rainforest Action Network, also part of the coalition, said the signal being sent by Chubb is a powerful one.
"With this policy, Chubb has become the first major U.S. insurance company to acknowledge the key role the insurance industry has to play in stopping the climate crisis," Allen said. "New coal projects cannot be built without insurance, and Chubb just dealt a blow to the dozens of companies that are still betting on the expansion of coal globally. We are encouraged to see Chubb taking real action to address climate change and insure a healthier future."
Chubb is the first major insurer in the US to announce a withdrawal from the coal industry joining all major European insurers. It’s the first shoe to drop but won’t be the last. All eyes are now on the other big US insurers including @LibertyMutual https://t.co/nUb6BtWuyX— Justin Guay (@Guay_JG) July 1, 2019
If the policy is as strong as Chubb claims, said Hammond, it could provide a major push inside the industry. "Other U.S. insurers, like Liberty Mutual and AIG," he said, "must now join Chubb in acknowledging the role the U.S. insurance industry has to play in stopping climate change by ending their support for coal."