US insurance companies recently joined the movement to stop or restrict coverage for coal projects. This year, the total number of insurers that withdrew their cover for coal projects significantly increased.
According to a report, coal is on its way to becoming “uninsurable” now that most coal projects cannot be built, financed, or operated without insurance. And as the biggest contributor to climate change, insurance companies are now taking a step to protect the environment by refusing coverage provision for coal projects.
The first insurers to back out from coal projects were from Europe. And for the first time, last March, US insurers — Axis Capital and Chubb — joined the club. Moreover, Australia-based firms, Suncorp and QBE, also agreed to restrict or stop insurance for coal projects.
Based on the 2019 report from the Unfriend Coal campaign, there are already ten firms that restricted their insurance policies for companies that operate or build coal power plants. This year, a total of 17 firms exited coal policies. The complete report will be launched on Monday at the insurance and climate risk conference that will be held in London.
One of the campaign’s co-ordinators, Peter Bosshard, said that they are hoping it would be so difficult to get a coverage that most coal projects won’t be able to push through.
Meanwhile, Lloyd’s of London and Asian insurers would be the last resort for fossil fuels. Known as the world’s biggest insurance market, Lloyd’s is the only major European company that will continue to offer coverage for future coal projects.
Lloyd’s was reportedly among those who excluded coal from its investments way back in April 2018. But then the chief executive, John Neal, ruled this out last month. According to the company, they take climate change seriously and they believe that insurance will play a part in supporting, and accelerating the transition to a low-carbon environment.