Swiss Re announced it no longer is providing re/insurance to businesses with more than 30 percent exposure to thermal coal across all lines of business.
The thermal coal policy applies to both existing and new thermal coal mines and power plants, and is implemented across all lines of business and Swiss Re’s global scope of operations.
This move marks the implementation of Swiss Re’s thermal coal policy announced in June 2017, which aims to manage carbon-related sustainability risks and support the transition to a low-carbon economy, the company said in a statement.
Further, the 30 percent threshold is in line with its previously stated thresholds on the investment side: in early 2016 the company stopped investing in companies that generate 30 percent or more of their revenues from thermal coal mining or that use at least 30 percent thermal coal for power generation. It also divested existing holdings.
Swiss Re is joining other insurers that have decided to abandon investments in coal-based businesses and/or stop providing coverage for such risks. These insurers include, Allianz, AXA, SCOR and Zurich Insurance, as well as the Lloyd’s marketplace.
Swiss Re said the decision to develop a thermal coal policy was based on its commitment to the “Paris Pledge for Action” in 2015, when Swiss Re affirmed its strong commitment to the effort to limit global warming to 1.5°C – 2°C above pre-industrial levels.
“The implementation of the coal policy is a major step forward in ensuring that our business activities are aligned with the Paris Agreement and related national efforts,” said Edi Schmid, Swiss Re’s group chief underwriting officer. “We are working with our clients to find the best solutions that enable them to adapt to a low-carbon economy.”
Patrick Raaflaub, Swiss Re’s Group Chief Risk Officer says: “It has been our goal to develop a comprehensive approach to coal underwriting. This has been a complex task and I am very pleased that we are now in a position to start rolling out our thermal coal policy.”
Swiss Re’s other sustainability initiatives include:
- Providing insurance coverages and making investments in renewable energy source, which are “critical to reducing greenhouse gas emissions and securing future energy supplies.”
- Developing an international guideline on risk management and sustainability of solar panel warranty insurance, the so-called Solar Panel Code of Practice (SPCoP), which was done in cooperation with solar photovoltaic research institutions. “It will help all involved parties, including producers, buyers, investors, banks and insurers to assess the long-term quality and reliability of solar panels and provide them with a best practice risk management framework to mitigate losses.”
- Encouraging the use of solar energy through its commercial insurance arm, Swiss Re Corporate Solutions. Its new product, the Solar Revenue Put, promotes the development of solar energy by driving down investment risk and making solar energy projects cheaper to finance.
- Through the use of wind hedges, Swiss Re Corporate Solutions helps protect wind power producers from reduced cash flow and earnings volatility.
Related:
- Allianz Expanding Climate Strategy, Doesn’t Want to Insure Coal Operations
- Insurance Industry Making ‘Significant Contributions’ in Climate Change Battle, Report Shows
- Europe’s Re/Insurers Cut Coal Investments by $20B; U.S. Firms Fail to Act: Report
- AXA Plans to Sell Coal Assets, Citing Concerns About Climate Change
Topics Reinsurance Swiss Re
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