Chubb is set to become the first of the big US insurers to announce a ban on coverage for coal companies. There has been a growing movement in Europe to stop selling insurance to coal-based power plants and coal mines because of the environmental damage they cause. So far US-based insurers have resisted joining in, despite increasing pressure from environmental action groups. Chubb will on Monday announce that it will no longer sell insurance to new coal-fired power plants or sell new policies to companies that derive more than 30 percent of their revenues from thermal coal mining.
“Chubb recognizes the reality of climate change and the substantial impact of human activity on our planet,” said Evan Greenberg, Chubb’s chief executive. The company, which is officially based in Switzerland but does much of its business in the US, will also stop making new investments in companies that have a big exposure to thermal coal mining or coal-based energy production. Joseph Wayland, Chubb’s general counsel, said that the decision was driven by business interests as well as broader environmental concerns.
“As a global insurer we are impacted by climate change, in everything from increasing fire risk to flooding,” he said. “Climate change … can be seen in the increasing severity and frequency of natural catastrophes.” Over the past two years, insurers have been hit by a series of large natural catastrophe claims. According to Swiss Re, the insurance industry faced $76bn of losses from natural catastrophes in 2018, the fourth-highest sum on record.
Not all of the catastrophes can be directly linked to climate change, but modeling specialists say that some of them, such as the series of wildfires that hit California last year, are made more likely by warmer temperatures. Chubb’s decision could increase the pressure of other big US insurers such as AIG and Travelers to act.