The Hartford, an insurer that has been previously recognized for its commitment to environmental stewardship, announced that it will take further steps in the effort by refusing to insure—or invest in—certain companies that negatively impact climate.
Specifically, in late December, the carrier said it will no longer insure or invest in:
- Companies that generate more than 25 percent of their revenues from thermal coal mining
- Companies that generate more than 25 percent of their energy production from coal
- Companies that generate more than 25 percent of their revenues directly from the extraction of oil from tar sands.
Providing even further specificity in a media statement, the carrier said that the new policy disallows new underwriting of the construction and operation of new coal-fired plants, as well as new investments in such activities. The policy also phases out existing underwriting relationships and calls for divesting of publicly traded investments which exceed the threshold by 2023. The only exceptions are for business lines that cover employees, such as disability, life and other voluntary products offered by our Group Benefits division—where The Hartford is providing protection to people.
Explaining the new guidelines in a media statement, The Hartford’s Chairman and CEO Christopher Swift said: “The world needs affordable, accessible energy to support global economic progress and, at the same time, action is needed to mitigate the impact such activity has on our climate.”
“Extreme weather affects people’s lives and businesses— and the risks are getting worse. As an insurer and asset manager we recognize the growing cost of this crisis, and we’re determined to use our resources and influence to address the challenge. That’s why we have taken a position on coal and tar sands.”
Ceres, a sustainability nonprofit organization which periodically assesses the climate change risk governances practices of insurers and reinsurers, identified The Hartford as the only U.S.-based property/casualty insurance to attain Ceres “leading” rating back in 2014. Early adoption of disclosure principles regarding prospective climate change risks, the formation of an internal multidisciplined environmental committee, and the establishment of a renewable energy underwriting unit were among the factors that Ceres considered in highlighting The Hartford’s leading position in a 2016 article for Carrier Management. (“Ceres Analysis: How The Hartford Addresses Climate Risks and Seizes Opportunities,” Jan. 3, 2016)
According to reporting by Insurance Journal, a dozen insurers have adopted policies to stop all direct insurance coverage to new coal projects—among them are Chubb, Allianz, AXA, Generali, QBE, Zurich, SCOR and Swiss Re. And seven have restricted their insurance services to existing coal projects.
The Hartford’s new policy brings to 18 the number of global insurers that have now restricted insurance services to coal projects in the past two years, according to a report by Insure Our Future, a group of climate activists pressuring the insurance industry to move away from supporting the fossil fuel industry.
Earlier this month, Liberty Mutual Insurance announced that it will drastically limit future underwriting for and investment in coal risks. Liberty Mutual said it also plans to phase-out coverage and investments for existing risks that exceed its new, tighter thresholds by 2023.
In July, Reuters reported that global insurer Chubb was the first U.S. P/C insurer to announced similar moves. Back then, Chubb said will no longer underwrite the construction and operation of new coal-fired plants or new risks for companies that generate more than 30 percent of their revenues from coal mining or energy production from coal. Insurance coverage it now writes for existing coal-plant risks that exceed this threshold will be phased out by 2022, and for utilities beginning in 2022. In addition, Chubb will not make new debt or equity investments in companies that generate more than 30 percent of revenues from thermal coal mining or energy production from coal.
Sources: The Hartford, Insurance Journal