Fidelis Insurance Holdings Limited (“Fidelis”) is pleased to affirm its commitment to sustainability by implementing extended underwriting guidelines which cover a range of industries and issues relating to its insurance lines of business.
The guidelines span both environmental and social topics, with four umbrella guidelines (Environmental, Human & Labour Rights, Animal Welfare, Rule of Law) and six industry-specific guidelines (Defence & Armaments, Forestry & Agriculture, Mining, Coal, Oil & Gas, Nuclear). Fidelis has already been focused on many of these issues, for instance by applying a Forced Labour Clause to marine cargo business since 2020 and taking a strong stance on animal testing.
Fidelis also stopped providing direct insurance for thermal coal plants, projects and infrastructure in 2020, but with the latest guidelines the restrictions around fossil fuels have been expanded. This reflects the key role insurance must play in supporting the transition towards a low-carbon economy and is in line with Fidelis’ recently made pledges as a member of the Net-Zero Insurance Alliance (NZIA).
Fidelis is fully committed to supporting clients in the energy sector on their journeys towards net-zero. Transition means that these companies must take immediate and impactful steps towards decarbonisation, including exploring the tremendous opportunities around clean energy.
The full fossil fuel guidelines now in place are as follows.
- Fidelis will continue to not directly insure thermal coal mines, power plants or infrastructure (and will not insure any company whose revenues from such activities account for >20% of revenues)
· Fidelis will only insure metallurgical coal if there are clear commitments and a timeline for achieving net zero emissions, in line with the Paris Agreement goals (rigorous, realistic and measurable)
LIMITED OIL AND GAS COVER
Oil & gas
- Fidelis will not directly insure tar sand extraction (and will not insure any company whose revenues from such activities account for >20% of total revenues)
- Fidelis will not directly insure Arctic oil & gas exploration and drilling (and will not insure any company whose revenues from such activities account for >20% of total revenues). The Arctic is defined as per the Arctic Monitoring and Assessment Programme (AMAP)
- Fidelis will investigate before supporting greenfield exploration and drilling, and will only do so subject to environmental impact considerations and where there is a strong economic rationale
- From 1/1 2024, oil & gas companies (upstream and downstream, offshore and onshore) will need to have clear commitments and a timeline for achieving net zero emissions, in line with the Paris Agreement goals (rigorous, realistic and measurable)
- Fidelis will not directly insure fracking operations, including for shale oil and natural gas (and will not insure any company whose revenues from such activities account for >20% of total revenues)
The new guidelines will initially apply to insurance business, with an approach being explored for treaty reinsurance. Fidelis will further refine its approach in 2023 in line with the NZIA commitments, which require the setting of intermediate decarbonisation targets within six months of the publication of the NZIA target-setting protocol (expected in January 2023).
Fidelis already has restrictions in place on fossil fuels within its investment portfolio, with an exclusion on coal as well also oil & gas (unless below 25% of revenues).
Richard Brindle, Chairman and Group Chief Executive Officer, said: “The insurance industry has a hugely important role to play in holding companies to account and making change happen – but nothing changes unless we are prepared to walk away from activities that are harmful to the environment, people, society and animals. We don’t see enough of this yet but we hope that insurers – and brokers – will increasingly engage with their clients to ensure that the insurance industry is not supporting damaging business practices.”
Olivia Brindle, Head of Sustainability, said: “Fidelis has a strong commitment to doing the right thing, but we also believe that sustainable underwriting is good risk management and that there is a long-term link between ESG and performance. A sustainable policy on fossil fuels is key to meeting decarbonisation commitments as well as mitigating climate risk, so while we do not have all the answers yet, we know we need to start taking action today.”