Convex Insurance: corals, coal and hypocrisy?
June 23, 2021
By Peter Bosshard, Global Coordinator of the Insure Our Future campaign
Founded by industry veteran Stephen Catlin in London and Bermuda two years ago, Convex Insurance quickly gained international prominence. The company has gained the trust of customers and investors, created more than 300 jobs and brought a strong team together.
Convex and its principal founder often emphasize values like fairness, dignity, respect and a long-term approach to their business. Yet some of the activities they specialize in undermine the sustainability of the society they serve.
Convex is one of the world’s leading insurers in the energy sector. At a time when we need to quickly move away from fossil fuels, Convex continues to underwrite the expansion of the oil, gas and coal industry without any restrictions.
In May, the International Energy Agency (IEA), the world’s leading energy research organization, concluded that we cannot afford building any more coal, oil and gas projects if we want to limit global warming to 1.5°C. Since then, UN Secretary General António Guterres has called on the insurance industry to phase out their support for fossil fuel projects.
Many insurance companies have started to heed such calls and shift away from fossil fuels. Since 2017, 28 leading insurers have ended or limited their services to the coal industry and a few of them have also stopped insuring tar sands and Arctic oil projects. “If we are not leading the charge against climate change, who would”, Allianz CEO Oliver Baete asked when he announced his company’s coal restrictions.
Not all insurers are taking a far-sighted view of fossil fuels and climate change though. According to Willis Towers Watson, an international insurance broker, the shift of leading global insurers from coal to renewable energy is “likely to be increasingly offset” by the arrival of Convex and GuideOne, a small insurer from the U.S.
Along with 38 other insurance companies, Convex has just confirmed that it is currently not underwriting the giant Carmichael coal mine in Australia. That’s a positive first step. But underwriting the expansion of coal and other fossil fuel projects elsewhere subverts the climate action which other insurance companies are taking. It also undermines the values which Convex and its founder Stephen Catlin have espoused.
In 2012, the Convex founder initiated the Catlin Seaview Survey, a major international effort to research and protect coral reefs. “The world’s reefs are in a dramatic state of decline”, this survey found, “due to pollution, destructive fishing and climate change. If this is not turned around, over 500 million people globally who rely on coral reefs for food, tourism income and coastal protection will be at great risk.”
One of the biggest factors contributing to the destruction of fragile coral ecosystems is the continued burning of fossil fuels. As long as Convex insures the expansion of coal, oil and gas projects, it fuels the destruction of the coral reefs which its founder aims to protect.
Stephen Catlin and Convex are also committed to improving the reputation of the insurance industry among young people, whom it needs to attract as future employees. Yet numerous surveys confirm that avoiding catastrophic climate breakdown, which is fueled by the burning of fossil fuels, is a primary concern of young people around the world.
“Realizing that [fossil fuel] projects can’t happen without backing from insurance companies was my wake up call”, Schuyler Holder, a risk management student from Houston, recently wrote in Teen Vogue. “I want to build a career with a company that is taking responsibility for its role in this crisis, not one that is insuring drilling in the Arctic, or making payouts to an oil company for a spill in the Gulf of Mexico.”
Stephen Catlin, who has ignored letters from the Insure Our Future campaign since March, is not just the CEO of Convex but also an avid gardener. “I believe that if you own land you don’t really own it”, he has said. “You have a duty of care to leave it in a better condition than when you received it.” What is true for a garden is also true for our fragile planet Earth. By ending insurance for new coal, oil and gas projects, Convex can live up to its principles and demonstrate its duty of care for our shared home.