Major European insurers underwriting 30% of US coal output despite net zero promises

Major European insurers underwriting 30% of US coal output despite net zero promises | Insurance Business Canada

Environmental

Major European insurers underwriting 30% of US coal output despite net zero promises

Leading companies responsible for covering the most coal 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

Underwriters at Lloyd’s of London

135,403,277

Starr

103,216,997

Skyward Specialty

66,914,669

James River

36,291,137

Westfield

34,120,579

Argo Group

31,208,980

Zurich

29,320,227

AXA

20,948,513

Swiss Re

18,233,969

Old Republic

18,233,969

AEGIS

9,334,585

Berkshire Hathaway

8,312,644

Aspen

7,431,273

Liberty Mutual

7,431,273

Cincinnati Financial

7,431,273

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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