Canadian P&C insurers slammed over "major contradiction"

Canadian P&C insurers slammed over “major contradiction” | Insurance Business Canada

Environmental

Canadian P&C insurers slammed over “major contradiction”

Advocacy group releases damning report

Environmental

By
Terry Gangcuangco

Investors for Paris Compliance (I4PC), a shareholder advocacy group, has released a critical report highlighting how the property and casualty insurance sector in Canada is supposedly bolstering fossil fuels while dealing with increasing climate-related claims.

The report, titled “Playing with Fire: Canadian Insurers and Fossil Fuels”, details how the industry allegedly shifts climate-related risks and costs on to consumers and taxpayers, all while continuing to underwrite and invest in fossil fuels.

Kiera Taylor, senior policy analyst at I4PC, asserted: “The industry is engaging in a major contradiction – despite recognizing the threat climate change poses to its business, property and casualty insurance companies foster that threat via underwriting and investing in the fossil fuel sector to the tune of billions of dollars.

According to the report, governments are being asked to cover the risks of more vulnerable properties and climate-related infrastructure damage, putting taxpayers at risk of being impacted further. Also, climate change is making certain regions and assets uninsurable while driving up insurance premiums nationwide.

In a release, I4PC also noted: “Despite a global trend of insurers restricting fossil fuel underwriting, the Canadian insurer Fairfax ranks among the largest underwriters of fossil fuels. In 2023, the top seven Canadian P&C companies or their parent companies invested over $19.5 billion in fossil fuels.”

Taylor, meanwhile, pointed out the influence of insurance companies on capital flows: “As society’s risk managers, Canadian insurers have the power to significantly influence capital flows, but instead of aligning with a climate-safe future, they continue to seek revenues from coal, oil, and gas, thereby driving up risk.