Written By: Riley Ruff
Big news! Chubb, the largest commercial insurer in the United States, became the first U.S. insurance company to restrict business with coal. They have created a coal policy addressing the company’s insurance coverage and investment in coal companies and projects. One of the most critical, yet overlooked ways to help solve the climate crisis is by targeting insurance companies — they financially aid and support the fossil fuel industry by investing their customers’ premiums into this dying industry. The 40 largest US insurance companies hold $450 billion in coal, gas, oil and electric stocks and bonds, which is why it is so important that Chubb is leading the way in the US with their new coal policy.
350 is a proud endorser of the Insure Our Future campaign, which is a campaign calling on US insurers to end the support for the fossil fuel industry, specifically coal and tar sands. This campaign is playing a critical role in pressuring insurance companies to rapidly transition away from fossil fuels. Chubb’s coal policy is a result of the great work of this campaign.
There are four key policy provisions:
- New coal plant construction and operation: Chubb will no longer insure the construction and operation of new coal-fired power plants.
- Coal Mining: Chubb will no longer insure new risks for companies that generate more than 30% of revenues from thermal coal mining. Chubb will also phase out coverage of existing risks by 2022.
- Utilities: Chubb will no longer insure new risks for companies that generate more than 30% of their energy production from coal. Chubb will also phase out coverage for existing risks by 2022.
- Investments: Chubb will not make new debt or equity investments in companies that generate more than 30% of revenues from thermal coal mining or that generate more than 30% of energy production from coal.
The company also became the first major US insurance company to sign the United Nations’ global business ambition pledge with the goal of capping global warming to 1.5 degrees Celsius above pre-industrial levels.
Evan G. Greenberg, Chairman and CEO of Chubb, said, “Chubb recognizes the reality of climate change and the substantial impact of human activity on our planet. Making the transition to a low-carbon economy involves planning and action by policymakers, investors, businesses and citizens alike. The policy we are implementing today reflects Chubb’s commitment to do our part as a steward of the Earth.”
Chubb is joining a growing number of global insurers that have restricted coal policies. Since 2017, 15 insurance companies across Europe and Australia that have adopted coal restrictions. Because Chubb is the biggest insurer in the US power sector, their announcement sets a precedent for other US insurance companies to follow. This is a large step in the right direction for a clean energy transition.
Although this coal policy is a step in the right direction, there are a few loopholes the company still needs to address. First, Chubb can still provide coverage for coal plants until 2022 “in regions that do not have practical near-term alternative energy sources.” Government policies in Southeast Asia actually favor coal, so Chubb can still cover new coal plants in that region. Secondly, Chubb will not be divesting their current holdings of at least $586 million in the coal industry. Lastly, Chubb’s new policy does not address the tar sands sector.
If you would like to learn more about this issue, The Rainforest Action Network (RAN) created a simple video explaining why the insurance industry is a major contributor to the climate crisis.
Chubb has made the first move; who will follow suit? Liberty Mutual, AIG, Berkshire Hathaway and the rest of the US insurance companies need to step up and insure a clean future. If you’d like to get involved with this issue, gather information and call on your local government to break ties with insurance companies that support fossil fuels. Tell them to move towards insurance providers that do not financially support fossil fuel companies or projects. The most effective way to tackle this issue is on a local level; no action is too small! Let your voice be heard to insure (pun intended) a safe, healthy and fossil-free future!