Lloyd’s of London syndicate Aspen Insurance has decided to cut ties with the existing Trans Mountain pipeline when its current insurance policy expires this summer, according to the climate activist group, Coal Action Network. Aspen joins 16 other insurers that have dropped Trans Mountain or vowed not to insure its expansion, said the network in a statement.
“As a matter of corporate policy, Aspen does not comment on the specifics of any application for insurance we receive, any insurance or reinsurance contract we underwrite, or any claim we pay, however, we can confirm that we do not plan to renew the Trans Mountain Tar Sands Oil Pipeline project,” said a spokesperson for Aspen in an email to Coal Action Network. (Aspen confirmed the statement with Insurance Journal).
The 16 other insurers that have ruled out insuring Trans Mountain are Allianz, Argo, AXA, AXIS Capital, Chubb, Cincinnati Global Underwriting, Generali, Lancashire, MAPFRE, Munich Re, QBE, RSA, SCOR, Suncorp, Talanx and Zurich Insurance Group.
Insurers are being pressured by environmental activist groups to end their coverage of fossil fuel infrastructure to combat climate change. Without insurance, they reason, these projects possibly could be stopped.
“It’s time for the rest of the Lloyd’s syndicates and the whole insurance sector to follow suit before the climate crisis gets worse,” said Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative, a Canadian First Nation activist group that has focused on stopping the proposed Trans Mountain Expansion (TMX) project. The group is concerned the project will exacerbate climate change and pollute the environment.
The pipeline expansion is described by Trans Mountain’s website as a twinning of the existing 1,150-kilometer (750 mile) pipeline between Strathcona County, near Edmonton, Alberta, and Burnaby, British Columbia. “It will create a pipeline system with the nominal capacity of the system going from approximately 300,000 barrels per day to 890,000 barrels per day.” (Strathcona is Canada’s hub for petrochemical industries.)
Despite the activists’ protests, the Canadian government is proceeding with the project.
“Over the last two years, insurers at Lloyd’s of London have come under increasing pressure to cut ties with Trans Mountain,” commented Andrew Taylor, organizer with Coal Action Network, which is seeking to end coal use in power generation and steel production, as well as coal extraction and coal imports, in the UK.
“It’s brilliant that Aspen is listening, but Lloyd’s syndicates like Arch and Beazley must follow suit, and more broadly we need a step-change across the whole Lloyd’s marketplace,” Taylor added.
“We are calling for leadership that mandates all insurers in their marketplace to end underwriting of new fossil fuel projects. While Lloyd’s CEO John Neal blocks meaningful climate action, we expect to see ongoing protests on Lloyd’s doorstep,” he cautioned.
Earlier this year, Lloyd’s had to close its London headquarters when about 60 climate change protesters from the climate activist group Extinction Rebellion blocked the main entrance of the building.
Lloyd’s has instituted a phased approach for exiting investments in and insurance for the fossil fuel industry, a plan it revealed in December 2020 in its Environmental, Social and Governance (ESG) report — but climate activist groups are demanding immediate action. The Coal Action Network described the Lloyd’s fossil fuel policy as “weak.”
The Lloyd’s ESG policy asked Lloyd’s insurers to stop providing new insurance cover by January 2022, for thermal coal-fired power plants, thermal coal mines, oil sands or new Arctic energy exploration activities tar sands projects. Further, Lloyd’s said it will phase out the renewal of existing insurance cover for these types of businesses by January 2030.
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