Only a few reinsurers have so far publicly committed to phase out coal from their treaty business
Climate campaigners from a number of groups have gathered to call on attendees of the Baden-Baden Reinsurance Conference to rule out coal from all reinsurance, including treaty reinsurance, to stop insuring all new oil and gas projects and to phase out existing oil and gas insurance in line with the 1.5C Paris Agreement goal.
Activists welcomed conference attendees dressed up as CEOs from Swiss Re, Lloyd’s and Munich Re in the fountain outside the conference centre with a clear message for the insurance industry: “Insure our future, not fossil fuels.”
It comes after catastrophic floods devastated parts of Germany this summer and wildfires in other parts of Europe, with the sixth IPCC report categorically stating that climate change will result in more frequent extreme weather events going forward.
While many reinsurers have adopted policies to stop direct coal coverage, only a few have so far publicly committed to phase out coal from their treaty business.
“As society’s risk manager, insurance companies have a responsibility to act on the science and immediately stop insuring all new fossil fuel projects,” said campaign group Insure Our Future.
Lindsay Keenan, European coordinator, Insure Our Future said: “Insurers are profiting from climate destruction by continuing to underwrite the expansion of the oil and gas industry. Allianz, AXA, Munich Re, SCOR and Zurich’s continued support of new oil and gas projects is completely at odds with the Paris Agreement and ignores science. The weight of evidence continues to grow: It’s time for action.”
Re/insurers must reward sustainability
At last week’s FERMA Talks, corporate insurance buyers called upon the industry to do more to incentivise clients as they undergo necessary transitions to bring their organisations into line with a zero carbon economy.
Lower premiums for fulfilling sustainable development goals (SDGs) is one way re/insurers can support the energy sector’s investment in renewables, for instance.
“From the perspective of a risk manager we haven’t seen anything in terms of reduction of premium in return for a sustainable business model,” said Mario Ramirez Ortuzar, risk and assets manager, Exolum.
“We manage 6,000km of pipelines moving hydrocarbons across Europe so people can heat their homes and drive their cars - and we cannot stop from one day to another,” he explained. “It is a huge transition and we need a lot of support from banks and insurers to deal with this transition.”
“If the solution for the market is they are only going to underwrite green business, we are not going to be able to invest that money for the transition.”