Insurers’ Retreat from Coal: is it Worth the Candle?
Fossil fuel divestment
Since 2010 the movement for fossil fuel divestment (‘the divestment movement’), started by the climate movement 350.org1, has been seeking to persuade institutions which have pension funds or other significant sums of money under their management to remove their investments from fossil fuel companies – with some success. For example, in July 2018 the Irish parliament passed legislation which requires the €8bn Ireland Strategic Investment Fund to dispose of all its coal, oil, gas and peat investments “as soon as is practicable”2, making it the first country in the world to fully divest public money from fossil fuels.
During the last few years the insurance industry, or at least parts of it, has gradually bought into the goals of the divestment movement. Although the divestment movement campaigns against coal, oil and gas projects, insurers to date have focused predominantly on one type of fossil fuel – coal. By the middle of 2018, nearly half of the global reinsurance market were reported to have divested some or all of their assets from coal, after Hannover Re joined Swiss Re, Munich Re, SCOR, Lloyd’s, Generali and the Markel Corporation in announcing its decision to divestfrom the coal industry. Together, these companies are estimated to control 45% of global reinsurance premiums.
Find more information from pages 12 - 19 in Willis Towers Watson's Power and Renewable Energy Market Review 2019 attached below.