Insurers must champion green and fair recovery from COVID-19 crisis, NGOs argue

Written by Adam Cadle

30/04/2020

Insurers must champion a green and fair recovery from the COVID-19 crisis because as professional risk managers they have a unique understanding of global threats, international NGOs supporting the Unfriend Coal campaign have said in a letter to industry associations.

The NGOs said the industry was fully aware of the risks of a global pandemic years ago but failed to do enough to ensure governments prepared effectively, and they have warned it not to make the same mistake again now that insurers recognise the climate emergency is the world’s greatest threat. Insurers are urged to address the COVID-19 and climate crises together by working to ensure economic stimulus programs are consistent with limiting climate change to 1.5°C in line with recommendations from the UN Intergovernmental Panel on Climate Change.

“International insurance associations and many of their member bodies have made numerous public commitments about the need for rapid climate action. If you are serious about these commitments you now need to speak out, vigorously and publicly, at the international and national level for green and fair recovery programs which are consistent with the IPCC’s 1.5°C pathways,” the letter said.

“In addition, the insurance industry has to get its own house in order with regard to the climate crisis. Insurance associations should encourage their member companies to divest from fossil fuel companies, to end cover for coal projects, coal companies and for oil and gas expansion projects, and to commit to phasing out cover for oil and gas companies in line with a 1.5°C pathway.”

Last week UN Secretary General Antonio Guterres said: “We must act decisively to protect our planet from both the coronavirus and the existential threat of climate disruption.” 1 He called for governments to use the huge sums committed to economic recovery from COVID-19 “to deliver new jobs and businesses through a clean, green transition” and for “climate risks and opportunities to be incorporated into the financial system”.

Progressive insurers are already lining up behind his call. It was welcomed by Günther Thallinger, Chief Investment Officer of Allianz and Chair of the Net-Zero Asset Owner Alliance, whose 22 members include insurers Aviva, AXA, Generali, Munich Re, Swiss Re and Zurich.

Peter Bosshard, coordinator of the Unfriend Coal campaign, said: “The role of insurers is to identify and manage risks for society. Seven years ago they recognised the threat of a global pandemic, but failed to ensure the world was prepared and simply excluded pandemic risks from their policies. Now that they acknowledge climate change is our greatest threat they must not repeat this mistake. Insurers have a duty to speak out loud and clear for strong climate action and set an example by aligning their businesses with international climate targets.”

The letter calls on a range of organisations representing insurers and reinsurers and industry professionals to respond with a public statement by May 18, including the International Insurance Society; Insurance Europe; the American Risk and Insurance Association; and the Geneva Association.

Since 2017, 19 insurance companies have ended or restricted insurance for coal projects and some have gone further, with restrictions on tar sands and Arctic oil. Yet none have committed to only insure projects which are consistent with a 1.5°C world and several major insurers, including AIG, Lloyd’s and Tokio Marine, have taken no steps to restrict cover for fossil fuels.

Related Articles