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. (The network is pushing for an end to 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.
Protests at Lloyd’s
Last week, 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 of 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.
However, climate activists say the policy isn’t clear about how the requirements will be enforced, and they warn that the target date of 2030 to phase out renewal of existing coverage is too distant when immediate climate action is needed.
Another climate activist group, Stand.earth, said its next campaign targets are other Lloyd’s of London insurers, Liberty Mutual, Starr Cos., and W.R. Berkley.
“The Intergovernmental Panel on Climate Change and the International Energy Agency reports have made clear that the Trans Mountain expansion project and any expanded oil and gas infrastructure is incompatible with achieving global climate targets,” said Sven Biggs, Canadian Oil and Gas director for Stand.earth.
“This announcement from Aspen makes clear that the Trans Mountain pipeline network is facing serious risks that financial institutions do not want to support: lack of consent from indigenous communities, decaying infrastructure, mounting costs, and a massive carbon footprint,” said Elana Sulakshana, senior energy finance campaigner at Rainforest Action Network. (The original pipeline was built in 1953).
“However, we urge Aspen to clarify that its commitment extends to not insuring all parts of the existing Trans Mountain pipeline and the expansion project in the future,” she said. “We also call on Arch, Beazley, and other Lloyd’s syndicates to follow suit and drop Trans Mountain, as well as rule out insurance coverage for the entire tar sands sector. History will not look kindly on any company that is continuing to insure massive oil expansion projects in 2022.”
Photograph: Demonstrators take part in an Extinction Rebellion protest on Westminster Bridge in London, on Friday, April 15, 2022. Climate-change protesters have snarled traffic by blocking four London bridges. Cars and red double-decker buses backed up along roads as hundreds of Extinction Rebellion activists occupied London’s Waterloo, Blackfriars, Lambeth and Westminster bridges, calling for an end to new fossil fuel investments. Photo credit: Stefan Rousseau/PA via AP.
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