Global insurer Liberty Mutual has announced a new policy that restricts coal insurance and investing. The announcement comes as the global climate movement is increasingly turning its focus on the insurance industry as a major driver of climate change. Increasing protests and media coverage of the industry’s investment strategy has prompted Liberty Mutual to reducing its support for the fossil fuel industry.
Liberty Mutual is among the world’s top six coal insurers and has $8.9 billion invested in fossil fuel companies and utilities. With today’s announcement, it becomes the eighteenth global insurer to adopt restrictions on coal insurance.
Rainforest Action Network (RAN) Energy Finance Campaigner Elana Sulakshana said:
“In response to a groundswell of public pressure, Liberty Mutual has taken a first step towards reducing its role in fueling the climate crisis. But the company still lags far behind what the science says is necessary, and does not match best practice among U.S. and global peers.
“While Liberty Mutual’s new policy sets out strong restrictions on insuring coal companies, it apparently does not rule out covering new coal-fired power plants or coal mines from companies with less than a 25% stake in coal. This is a major loophole because, to keep warming below 1.5ºC, the science is clear that the climate cannot withstand any new coal projects.”
In November AXA issued a statement saying it would no longer invest in coal, and refuse to insure large scale coal fired power station projects. QBE and Suncorp in Australia have also made the same committment to turn away from coal in particular, and fossil fuel projects in general. Swiss Re, Legal & General, Aviva, Allianz and Zurich have also ended their interest in insuring coal power projects.
Insurance Edge Comment;
The fact remains that across the world many countries will continue to develop their economies, expand consumer demand and increase their population. Coal, gas or oil will provide the heat to turn the turbines, that power all those laptops, phones, public transport, cooking, light and factory production. Perhaps the solution for some nations will be a government backed insurance scheme, although less stable countries may find they need a global insurer to cover their infrastructure.
Activists can score easy wins in western democracies, and change policies via boycotts, head office demonstrations, social media shaming campaigns etc. but in one-party states where protests are crushed by armed Police the lights will stay on powered via the cheapest option. That’s realpolitik.