Axis backs away from coalmine project
Axis Capital has dropped out of bidding to provide insurance coverage connected to a major coalmine project in Australia, according to a source.
The Bermudian-based company is said to have withdrawn its quote for insurance of a railway at the Carmichael mine in Queensland, which is expected to produce eight to ten million tons of thermal coal annually.
A Reuters report said the information on the decision came from a source close to the company, who also said that Axis is preparing to publish a formal policy to more widely cut its exposure to coal.
A United Nations report has found that phasing out coal power worldwide by 2050 could limiting global warming to 1.5C through reduced carbon emissions.
In July, Axis told The Royal Gazette in a statement that it was expecting to reduce its exposure to coal. This came on the heels of Chubb becoming the first major US-market insurance company to join a trend among insurers and reinsurers to pull away from the coal industry. Others include Axa, the parent of Axa XL, Allianz and Zurich Insurance Group, which have adopted policies to cut their exposure to coal projects.
The Unfriend Coal campaign last year surveyed 24 major insurers and scored them on their policies on coal insurance, divestment and other aspects of climate leadership. The 2018 scorecard gave no points to Axis, Chubb, American International Group, Liberty Mutual, Sompo, Tokio Marine, and others.
Whereas Swiss Re topped the list for its policies, with Axa also among the “leaders”.
When asked about the Reuters report regarding Axis and the Carmichael coalmine project, an Axis spokesman told The Royal Gazette: “As a policy we don’t comment on individual risks.”
Meanwhile, reacting to the report, Peter Bosshard, coordinator of the Unfriend Coal campaign, said: “The Adani Group’s giant Carmichael coalmine is incompatible with international climate targets and Axis is the 15th insurer and 58th financial institution to rule out support for this project.”
Separately, Willis Towers Watson has published its Mining Risk Review that shows an increasing pace of insurers refusing to underwrite coal mining risks.
However, the report also notes that Bermudian underwriters have remained steadfast in their support for underwriting coal mining risks.
“Over the last 10 to 15 years the Bermuda Property market has proven to be consistent and disciplined in its approach to underwriting mining risks,” the report said.
“Whether writing US or international risks, the Bermuda market has supported the class through the various underwriting cycles, demonstrating a commitment to the industry.
“And while there are instances of markets pulling back from or exiting thermal coal, the core Bermuda carriers remain steadfast, and have largely maintained a consistent appetite, albeit that consistency has been dependent upon achieving ‘rate adequacy.’”
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