The number of insurers turning their backs on coal more than doubled in 2019, activist groups said Monday, sapping the viability of projects using the highly-polluting fuel.
Coal exit policies have been announced by 17 of the world’s biggest insurers controlling 46 percent of the reinsurance market and 9.5 percent of the primary insurance market, said the Unfriend Coal campaign, a coalition of environmental groups, as it released its third scorecard on the sector.
“This action is having a tangible impact,” it said, citing brokers as saying that costs are increasing to insure coal facilities with certain projects already being unable to obtain any coverage.
Increasing operating costs put coal -- the dirtiest fossil fuel and biggest single contributor to human-made climate change -- at a commercial disadvantage. An inability to buy coverage makes it impossible to raise finance for new projects.
The report pointed to the struggle the Indian group Adani has had to find insurance to develop the huge Carmichael coal mine in Australia, noting that at least 16 international insurers have ruled out underwriting the project.
“The industry’s retreat from coal is gathering pace as public pressure on the fossil fuel industry and its supporters grows,” said Peter Bosshard, coordinator of the Unfriend Coal campaign.
However, he noted that major US and Asian insurers continue to insure and invest in coal projects.
“All responsible companies must make coal uninsurable by ending support for both new and existing mines and power plants,” added Bosshard.
France’s AXA was the latest to announce plans to exit coal, pledging last week to make a complete pullout from coal investments by 2040.
Reinsurance firm Swiss Re was the top-ranked firm for both its coal insurance and divestment policies.