Leading European insurers underwriting 30% of US coal despite net zero ambitions
Leading European insurers underwriting 30% of US coal despite net zero ambitions | Insurance Business Australia
Environmental
Leading European insurers underwriting 30% of US coal despite net zero ambitions
Companies responsible for the most coal insured revealed
Environmental
By
Kenneth Araullo
A recent report by Insure Our Future reveals that major European insurers are supporting nearly one-third of US coal production despite their commitments to achieve net-zero emissions.
The report highlights insurers like Lloyd’s of London, Zurich, and Swiss Re among the top ten underwriters for 25 major US mines, contributing to over 60% of the country’s coal production in 2022. These insurers underwrite 13 mines, constituting 30.7% of national output.
The insurers covering the most coal production are as follows:
Insurer
Production (short tons)
Mine Count
AIG
167,428,662
7
Underwriters at Lloyd’s of London
135,403,277
10
Starr
103,216,997
9
Skyward Specialty
66,914,669
5
James River
36,291,137
3
Westfield
34,120,579
2
Argo Group
31,208,980
4
Zurich
29,320,227
2
AXA
20,948,513
2
Swiss Re
18,233,969
1
Old Republic
18,233,969
1
AEGIS
9,334,585
1
Berkshire Hathaway
8,312,644
1
Aspen
7,431,273
1
Liberty Mutual
7,431,273
1
Cincinnati Financial
7,431,273
1
Coal is a significant contributor to CO2 emissions, and the US stands as the fourth-largest coal producer globally, mining 595 million short tons in 2022 alone. Despite mounting global pressure and targeted campaigns, Insure Our Future said that leading insurers are exploiting loopholes or disregarding their own policies to continue underwriting coal mines.
AIG emerges as the largest underwriter of US coal, insuring seven mines accounting for 28.1% of the national output. Lloyd’s of London follows, underwriting 10 mines, constituting 22.8% of the output. While Lloyd’s aims to lead the market towards a net-zero underwriting position, it does not mandate or restrict the underwriting policies of its market members.
The report also highlights the need for insurers to commit firmly to cease insuring all coal mining in OECD countries by 2030 and reduce their coverage of coal by 50% by 2025, aligning with the actions taken by other leading insurers based on climate science.
The report underscores the urgency to address coal emissions, emphasizing that emissions from coal combustion need to fall drastically by 2025, 2030, and 2050 to stay within a 1.5°C global warming limit. However, global coal production reached an all-time high in 2022.
Furthermore, many of the insurers mentioned also provide homeowners and small business coverage. However, insurers are increasingly withdrawing from climate-affected regions or raising premiums due to the fear of significant financial losses from climate-related natural disasters, leaving home and business owners highly vulnerable.
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