Insuring a safe climate?
Despite being on the front line in terms of paying out on the impacts of climate change, Australia’s major insurers – IAG, QBE and Suncorp – continue to be major supporters of the fossil fuel industry by underwriting fossil fuel projects and investing in fossil fuel companies. Regulators, including APRA here in Australia, have started to wake up to “potentially system-wide” financial risks posed by climate change, and are calling on the insurance industry to take its rightful position as a leader in the public discourse on the issue. Some moves to reduce exposure to climate risk have been made by international insurers, with AXA announcing in 2017 that it will no longer underwrite companies relying on coal mining or coal power generation for more than half of their business. The French based insurer’s asset management arm has also divested around $190m worth of coal holdings. The world’s biggest insurer Allianz, and UK-based Aviva have also made significant coal divestments. Despite international movement, and climate risk warnings from the likes of APRA, Australia’s general insurers have so far failed to take decisive action. Our major insurers – along with the Insurance Council of Australia – have been worryingly quiet in the public discourse around climate change and the risks it poses.
What we need to see
We’re calling on Australia’s major general insurers, IAG, QBE and Suncorp, to:
– Rule out underwriting projects that expand the fossil fuel industry;
– Plan to reduce underwriting of the fossil fuel industry in the future consistent with the Paris Agreement;
– Divest from fossil fuel assets in its investment portfolio, and use that money to invest in renewable energy; and
– Take a leading role in the public debate on climate change, calling for action from Australian governments and businesses to limit global warming as much as possible;
– Educate customers about the effects of climate change on premiums, and participate in risk mitigation measures.