Log In

Reset Password

Insurers need to stop fuelling climate disasters

First Prev 1 2 Next Last
Lisa Rose, a Bermudian, is a climate campaigner with 350.org and co-founder of Bermuda Environmental Sustainability Taskforce

Bermuda has dodged a bullet and avoided the worst impacts of Hurricane Fiona. But Puerto Rico and the Dominican Republic were not so fortunate. The hurricane dropped up to 30 inches of rain on these islands, killed at least eight people, knocked out power for more than three million and caused at least $4 billion in damages.

As the oceans are warming, we know that climate change will only make hurricanes more devastating in the years and decades to come. The main driver of this process is the burning of coal, oil and gas in what United Nations Secretary-General António Guterres has called a “broken energy system” and “collective suicide”.

Fossil fuel projects could not be financed, built and operated if insurance companies did not underwrite their risks. As it happens, Bermuda’s specialty insurers have a strong presence in the energy market and are among the most active underwriters of coal, oil and gas companies and their projects.

Insurance companies have warned about escalating climate risks for several decades. In recent years, many of them have started to put their money where their mouth is and have restricted their support for the fossil fuel industry. By now 41 major insurers have adopted coal exit policies and 12 have restricted their services for oil and gas.

Among Bermuda’s specialty insurers, Axis Capital and Fidelis have adopted restrictions on their services to the coal and tar sands industry, and Fidelis will restrict its cover for conventional oil and gas companies from 2024. Convex has stopped insuring new thermal coalmines but continues to support coal power plants, and oil and gas projects.

“The insurance industry has a hugely important role to play in holding companies to account and making change happen,” Richard Brindle, the Fidelis chief executive, said only last week. “But nothing changes unless we are prepared to walk away from activities that are harmful to the environment, people, society and animals.”

In contrast to Axis Capital and Fidelis, Bermudian insurers Allied World, Everest Re, Argo Group, Hamilton, Lancashire and Ark have not adopted any restrictions on their services to the coal, oil and gas industry. They continue to underwrite the expansion of fossil fuel projects as the climate crisis creates ever more severe hurricanes, floods, heatwaves and droughts, and wreaks havoc on the countries least responsible for it.

Bermuda is also trying to position itself as the global centre for the rapidly growing market for climate risk finance. “We have the credibility to reach out to investors and entrepreneurs in this space,” argues Stephen Weinstein, the chairman of the Bermuda Business Development Agency, “in part because of our background in climate leadership in re/insurance.”

We applaud Bermuda’s interest in strengthening the global system of climate risk finance. But the specialty insurers in Hamilton can’t have it both ways: arsonists can’t be firefighters and insurance companies can’t continue to fuel climate breakdown and play a credible role in managing climate risks at the same time.

As Bermudians repair the damages and count their blessings after Fiona’s near-miss, the insurers in Hamilton should reconsider their role. They should no longer act as fossil fuel insurers of last resort while we can still avert the most serious impacts of climate change and should position themselves as leading underwriters of the clean energy transition instead.

Lisa Rose, a Bermudian, is a climate campaigner with 350.org and co-founder of Bermuda Environmental Sustainability Taskforce

Peter Bosshard, a citizen of Switzerland, co-ordinates the international Insure Our Future campaign (Photograph by Christine Bärlocher)

• Peter Bosshard, a citizen of Switzerland, co-ordinates the international Insure Our Future campaign

You must be Registered or to post comment or to vote.

Published September 29, 2022 at 7:59 am (Updated September 28, 2022 at 5:20 pm)

Insurers need to stop fuelling climate disasters

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon