AXIS Capital Becomes First U.S. Insurer to Restrict Both Coal and Tar Sands
October 16, 2019
Today, insurer AXIS Capital (NYSE: AXS) announced a new policy on fossil fuels to accelerate the transition to a low-carbon economy. In an unprecedented step for a U.S. insurer, AXIS Capital will restrict insurance for both coal and tar sands projects and companies.
“We welcome AXIS Capital’s new policy as a major win for our climate and for Indigenous rights. Without insurance, destructive energy projects cannot be built, and AXIS joins a growing movement of insurers taking action to keep fossil fuels in the ground,” said Elana Sulakshana, Energy Finance Campaigner at Rainforest Action Network. “AXIS has raised the bar for U.S. insurers by restricting both coal and tar sands insurance. The ball is now in Liberty Mutual and AIG’s court to take responsibility for their role in the climate crisis.”
AXIS Capital is an insurer and reinsurer that is active in the energy sector. It is registered in Bermuda but the majority of employees, including senior management, and business operations are in the U.S. According to the new policy, AXIS will not provide insurance or facultative reinsurance for new thermal coal or tar sands extraction and pipeline projects and their dedicated infrastructure. It will also end coverage for companies generating at least 30% of their revenues from thermal coal mining, producing at least 30% of their power from coal, or holding more than 20% of their reserves in tar sands.
However, the policy includes exemptions for “countries where sufficient access to alternative energy sources is not available” over the next five years. This could allow AXIS to cover the majority of the 800+ coal-fired power plants currently proposed globally, effectively postponing action until 2025.
“With this announcement, AXIS Capital recognizes that insuring the Trans Mountain tar sands pipeline expansion is the epitome of risk: for Indigenous land rights, our water, and the climate. First Nations have led resistance to the tar sands across North America, fighting project after project that have not obtained the Free, Prior, and Informed Consent of impacted First Nations. Other insurers should take note, as the companies that continue to cover tar sands will be targets for our movement,” said Kukpi7 Judy Wilson, Secretary-Treasurer of the Union of British Columbia Indian Chiefs and Chief of the Neskonlith Indian Band.
“With AXIS Capital, reinsurers controlling 45% of the non-life market have now adopted coal exit policies”, commented Peter Bosshard, coordinator of the Insure Our Future campaign. “No longer covering coal is quickly becoming the global norm for insurers and reinsurers, and the laggards in the United States, in East Asia and on the Lloyd’s market must quickly follow suit.”
“Youth are rising up around the globe, calling on governments and corporations to tackle the climate emergency. We are at a point of utmost urgency. While AXIS’ policy is a good step, it must eliminate the geographic loophole in its policy and stop insuring new coal projects everywhere today, especially in Southeast Asia where there are hundreds of proposed power plants. We call on insurers around the globe to step up and improve upon AXIS’ policy,” said Brett Fleishman, Head of Finance Campaigns at 350.org.
Over the past year, Insure Our Future has been pressuring U.S. insurers, including AXIS, to stop insuring and investing in coal and tar sands projects and companies. Since the launch of the Insure Our Future campaign two years ago, of which Insure Our Future is the U.S. branch, 17 insurers have adopted policies restricting coal insurance and four insurers have adopted policies on tar sands insurance. The shift away from coal and tar sands is accelerating, with more than half of these policies adopted in 2019.
In July, Chubb became the first U.S. insurer to restrict involvement in coal. Today’s announcement marks another global first: AXIS Capital is the first specialty insurer to adopt a policy on any fossil fuel, which demonstrates that other specialty insurers can and should take action to stop insuring coal and tar sands as well.
Insure Our Future is supported by 350.org, Indigenous Environmental Network, Greenpeace, Rainforest Action Network, Public Citizen, and Sierra Club, among others.