Global insurer Chubb announced it will no longer underwrite the construction and operation of new coal-fired plants or new risks for companies that generate more than 30% of their revenues from coal mining or energy production from coal.
Insurance coverage it now writes for existing coal-plant risks that exceed this threshold will be phased out by 2022, and for utilities beginning in 2022.
In addition, Chubb will not make new debt or equity investments in companies that generate more than 30% of revenues from thermal coal mining or energy production from coal.
“Chubb recognizes the reality of climate change and the substantial impact of human activity on our planet,” said Evan G. Greenberg, Chairman and CEO of Chubb. “Making the transition to a low-carbon economy involves planning and action by policymakers, investors, businesses and citizens alike. The policy we are implementing today reflects Chubb’s commitment to do our part as a steward of the Earth.”
Chubb provided these provisions of its new climate policy:
New coal plant construction and operation. Chubb will not underwrite risks related to the construction and operation of new coal-fired plants. Exceptions to this policy will be considered until 2022 in regions that do not have practical near-term alternative energy sources, and taking into account the insured’s commitments to reduce coal dependence.
Coal mining. Chubb will not underwrite new risks for companies that generate more than 30% percent of revenues from thermal coal mining. Chubb will phase out coverage of existing risks that exceed this threshold by 2022.
Utilities. Chubb will not underwrite new risks for companies that generate more than 30% of their energy production from coal. Chubb will phase out coverage of existing risks that exceed this threshold beginning in 2022, taking into account the viability of alternative energy sources in the impacted region.
Investments. Chubb will not make new debt or equity investments in companies that generate more than 30% of revenues from thermal coal mining or that generate more than 30% of energy production from coal.
Chubb said the coal policy is expected to have a de minimis impact on premium revenues and no impact on investment performance.
Other financial firms have made similar moves concerning coal-related underwriting and investment. They include Hannover Re, Allianz Group, Munich Re, Swiss Re, the insurance unit of BNP Paribas.
According to a California Insurance Department survey, there has been an increase in the number of insurers that divested or are committing to divest from thermal coal investments following his efforts to address climate-related financial risk. According to the 2018 survey, an additional 57 insurers committed to divesting some or all of their thermal coal investments in 2018 compared to 2016.
Related:
- Survey from Regulator of Largest U.S. Insurance Market Shows More Coal Divestment by Insurers
- Munich Re to Stop Investing in Coal-Related Business, Insuring New Coal-Fired Plants
- Allianz Expanding Climate Strategy, Doesn’t Want to Insure Coal Operations
- Swiss Re No Longer Offers Re/Insurance to Firms with More Than 30% Coal Exposure
- Berkshire Opposes Political Contribution Disclosure, Fossil Fuel Divestment Proposal
- Fossil Fuel Divestments by Insurers & Other Investors Top $3.4 Trillion: Activists
- Europe’s Re/Insurers Cut Coal Investments by $20B; U.S. Firms Fail to Act: Report
Topics Climate Change Chubb
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