Lloyd’s insurer Axis Capital announced will withdraw its insurance coverage for both coal and tar sand risks.
The news has been welcomed by environmental groups which say the decision leaves nearly half the global reinsurance market restricting cover for coal.
Axis is only the second US insurer to withdraw insurance services for coal and the first to include tar sands in its policy. Chubb became the first US insurer to turn its back on the sector in July. Campaign Unfriend Coals said the decision will now intensify pressure on AIG and Liberty Mutual to adopt their own fossil fuel policies.
Peter Bosshard, coordinator of the Unfriend Coal campaign, said: “With Axis Capital, reinsurers controlling 45% of the non-life market have now adopted coal exit policies. No longer covering coal is quickly becoming the global norm for responsible insurers and reinsurers, and the laggards in the United States, in East Asia and on the Lloyd’s market must quickly follow suit.”
Axis has revealed it will no longer provide insurance or facultative reinsurance for new thermal coal or tar sands extraction and pipeline projects and their dedicated infrastructure. It will also end coverage for companies generating at least 30% of their revenues from thermal coal mining, producing at least 30% of their power from coal, or holding more than 20% of their reserves in tar sands.
However, the policy includes exemptions for “countries where sufficient access to alternative energy sources is not available” over the next five years. This could allow Axis to cover the majority of the 800 plus coal-fired power plants currently proposed globally, effectively postponing action until 2025.
Since the launch of the Unfriend Coal campaign two years ago, 17 insurers and reinsurers have adopted policies restricting coal insurance and four have adopted policies on tar sands insurance. More than half of these policies were adopted in 2019.