Bermuda insurers provide $1.1bn to new coal projects, report alleges
As many insurers withdraw their coal coverage owing to environmental concerns, insurers in Bermuda are filling the breech, says a new environmental report.
The report Exposed The Coal Insurers of Last Resort, released yesterday by environmental advocacy group Insure Our Future, said Bermudian insurers have provided $1.1 billion in coverage, including $728 million from Allied World, for the construction of several new Korea Electric Power Corporation coal plants in Asia.
Insure Our Future said Allied World and Convex Insurance provided six per cent of cover ($273m) for Vung Ang 2 in Vietnam. The power plant will come into operation in January 2025.
They also revealed that four years after KEPCO insured construction of the Nghi Son 2 in Vietnam in 2019, 72 per cent of the insurance capacity which underwrote that project was withdrawn.
Global co-ordinator for the campaign Peter Bosshard said the insurance contract information in the report was obtained from the Office of the Korean National Assembly Member Soyoung Lee, through official channels.
According to the report, five “coal insurers of last resort” provide 72 per cent of the insurance capacity for new coal projects still available today.
Allied World is listed in the report as among the “main company laggards”.
“Companies like Allied World should follow their peers and should stop insuring new coal, oil and gas projects,” Mr Bosshard said. “They should phase out their support for existing coal.”
But Allied World dismissed the report last night, saying it was “old and not current”.
“We have rigorous underwriting guidelines that align with guidance from the Paris Agreement,” an Allied World spokesman said.
“We continuously recalibrate our underwriting guidelines to align with current values, jurisdictional and regulatory provisions, and global trends.”
She said Allied World continues to “limit their exposure” in areas that do not align with their guidelines and values.
Insure our Future also had Convex in its crosshairs.
In February, Convex said it would stop insuring new coalmines, but Mr Bosshard said: “Convex will no longer insure new coalmines but they have not adopted any restrictions on insuring new coal power plants. If there were another Vung Ang 2, in other words, Convex would still be able to underwrite it.”
A spokesman for Convex said in response: “Due to client confidentiality, Convex is unable to comment on specific risks or types of business which it may or may not underwrite.”
The report also said: “Far too many insurance companies continue to insure the operation of coal utilities which have no plans to phase out fossil fuels. These insurers are underwriting a development path which is projected to take the planet to a catastrophic 2.7C of global warming by the end of the century.”
“When I started doing this the only people warning about climate change besides environmentalists were the insurance companies,” Mr Bosshard said. “Now, 30 years later, some insurance companies are still insuring new coal projects. That is hard to understand.”
But he has seen a lot of progress with the campaign.
When he started people said the insurance industry would never take a perfectly legal sector of business off the table. But when they went public with the campaign “the dominoes started to fall”.
In April 2017, Axa, one of the world’s biggest insurers, adopted the first coal exit policy.
The report calls for all insurance companies to immediately stop insuring any new coal power, coal mining and associated infrastructure projects.
• To read the full report go to global.insure-our-future.com