Slowly but surely, the U.S. insurance industry is starting to acknowledge its role in driving climate change, and taking steps to stop. Last month, AXIS Capital became the second U.S. insurer to adopt a policy on fossil fuel insurance, following Chubb’s announcement in July. AXIS’s policy is the strongest one yet for a U.S. insurer, as it applies to tar sands oil as well as coal.
WHY INSURANCE MATTERS
Without insurance, fossil fuel companies would not be able to exploit new coal, oil, and gas deposits, build new infrastructure, or continue existing operations. These climate-killing corporations rely on insurers for everything from covering the costs of oil spills and gas explosions to legal fees when executives are sued (which is increasingly happening over climate liability). Insurers decide what risks are acceptable in our society, which gives them a uniquely important role to play in accelerating the low-carbon transition.
THE POLICY DETAILS
According to its new policy, AXIS will not provide insurance for new coal or tar sands projects. It will also end insurance for coal and tar sands companies. For more details on the company and the policy, check out this briefing we put together.
This means that AXIS will not insure the Trans Mountain, Keystone XL, or Line 3 tar sands pipelines, or new tar sands mining projects like Teck Resources’ massive Frontier mine. This is a major win for the climate and Indigenous rights! The tar sands sector is hugely carbon-intensive and spells disaster for Indigenous land rights, the local environment in Alberta where the majority of reserves are located, and waterways along pipeline routes. Kukpi7 Judy Wilson, Secretary-Treasurer of the Union of British Columbia Indian Chiefs and Chief of the Neskonlith Indian Band, called on other insurers to follow suit:
“First Nations have led resistance to the tar sands across North America, fighting project after project that have not obtained the Free, Prior, and Informed Consent of impacted First Nations. Other insurers should take note, as the companies that continue to cover tar sands will be targets for our movement.”
While AXIS’s new fossil fuel policy is a solid start, it could be strengthened by closing a key loophole. AXIS can keep insuring the construction of new projects in “countries where sufficient access to alternative energy sources is not available” for the next five years. By postponing action until 2025, AXIS could provide coverage for hundreds of new coal-fired power plants, even though the science is clear that coal power cannot expand. To keep warming below 1.5ºC, United Nations Secretary-General Antonio Guterres recently called for a halt to the construction of any new coal power plants after 2020. The strength of the coal policy will depend on how this exemption is interpreted, and we’ll be monitoring AXIS closely on this point.
BY THE NUMBERS
AXIS Capital joins a global movement of insurers that are stepping away from fossil fuels. With AXIS’s policy:
- 17 insurance companies have adopted policies restricting coal insurance, and 20+ major insurers have adopted policies on coal investing.
- 4 insurance companies have adopted policies restricting tar sands insurance, and 8 have policies on tar sands investing.
- 45% of the non-life reinsurance market has adopted coal exit policies.
- 500+ GW of proposed coal-fired power may be exempt under AXIS’s policy, meaning that they need to close the loophole to really move away from expanding coal.
Following this announcement, all eyes are on U.S. insurers that are refusing to even acknowledge their role in the climate crisis, yet alone take action. Liberty Mutual is facing a new campaign we’ve just launched calling on them to stop insuring and investing in tar sands and coal. AIG is also coming under increasing pressure – as are the New Zealand All Blacks, the most famous team in world rugby, which AIG sponsors – because it will not rule out the Adani Carmichael coal mine in Australia.
We are taking to the streets from Boston to London to Australia to hold these companies accountable, and we need your support. Here’s what you can do:
- Are you a customer with a home or auto policy? You can tell your insurance provider to cut fossil fuels — send a message to Liberty Mutual here!
- Do you want to organize in your community? Get your town or city to adopt a policy that favors buying insurance from companies like AXIS (as San Francisco and Paris have already done).
- Are you a prospective insurance employee? Add your voice to this petition calling on your industry to take action! (And check out this powerful article in Teen Vogue by the risk management student who started the petition.)
- Are you currently working at a company that’s part of the problem? Feel free to reach out!
Join us in demanding insurance companies stop driving the climate crisis!