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The Actuary The magazine of the Institute & Faculty of Actuaries

World’s largest insurers refuse to support 'test case' Australian coal mine

Ten of the world’s largest insurers will not support a proposed Australian coal mine described by NGOs as a “test case” that will show who is “interested in profiting from climate chaos”.

Insurers moving away from coal ©iStock
Insurers moving away from coal ©iStock

It is estimated that the Adani Group’s controversial Carmichael coal mine would produce greenhouse gas emissions equivalent to what the whole of Australia generates over eight years.

All of the country’s major banks have publicly rejected any involvement in the $1.5bn (£1.2bn) project, with Adani last month admitting it would be forced to self-finance the mine.

Allianz, AXA, Generali, and Zurich are among the insurance firms now also refusing to support the project, along with the first major US insurer to take action on coal – FM Global.

“The coal mine demonstrates whether insurers care about managing climate risk or are more interested in profiting from climate chaos,” Unfriend Coal campaign coordinator, Lucie Pinson, said.

“Companies unwilling to rule out insuring this disastrous project are threatening the future of our climate, the unique environment of the Barrier Reef, and the wellbeing of local people.”

The Intergovernmental Panel on Climate Change believes at least 59% of all coal power must be phased out by 2030 to meet the Paris Agreement’s target of limiting global warming to 1.5˚C.

It is thought that the Carmichael coal mine would emit 4.6 billion tonnes of CO2 over its approved lifetime, but it cannot be built or operated without insurance coverage.

In response, 73 organisations representing more than 76 million people earlier this month sent an open letter to 30 leading insurers calling on them to rule out support for the project.

While 10 companies have agreed to not insure the mine, 16 others with no policy on coal have yet to respond, including AIG, Berkshire Hathaway, Liberty Mutual and Chubb.

Jason Opeña Disterhoft, campaigner at Rainforest Action Network, said: “Limiting global warming to 1.5˚C is incompatible with expansion of coal via carbon bombs like Adani’s Carmichael mine.

“FM Global not supporting the mine makes it the first US insurer to publicly commit to not insure any coal project – it’s time for AIG, Berkshire Hathaway and their US peers to follow suit.”

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