NEWS ALERT: Liberty Mutual, HDI Global, XL and Aspen Re insuring Adani coal mine

June 11, 2020

Documents leaked to the Sydney Morning Herald and seen by the Unfriend Coal campaign reveal that Liberty Mutual, HDI Global, XL Australia and Aspen Re are holding current policies for “early works project insurance” on the Adani Group’s Carmichael coal mine and rail network in Australia. The policies were brokered by Marsh.

The proposed Carmichael coal project would be Australia’s biggest ever coal mine and would open one of the largest unexploited thermal coal basins on Earth. By now 67 companies have ruled out working on the project, including numerous major insurers.

Liberty Mutual said in 2019 that it “would not be participating in the insurance program for the anticipated operational phase of the Carmichael mining project”. A spokesman for the company told the SMH that prior to that announcement, Liberty had a policy for early works construction that expired in October 2019 and was contractually obligated to cover construction defects for a further 24 months. Liberty Mutual has not ruled out further coverage of the Carmichael project construction and a massive loophole in its coal policy allows the cover of new coal projects.

Talanx, the owner of HDI Global, announced last year “in principle we will not insure new coal power stations and new coal mines”. An HDI spokesman said the company did not cover the Carmichael project directly but could not rule out having policies with contractors employed by Adani.

A spokeswoman for XL Australia, a subsidiary of French insurer AXA, said it also had default cover related to an expired policy that would end in 2021.

The documents were leaked by a Marsh & McLennan employee, who told the SMH: “Departments have lost domestic clients over this already and colleagues are concerned about where Marsh stands on climate change and what we represent.”

Campaigners vowed to ramp up their pressure on the insurers behind the Adani coal mine. “For Liberty, HDI, Aspen and Marsh to do their dirty deals with Adani just as Australia’s worst ever bushfire season was escalating adds insult to injury”, Pablo Brait of the Australian campaign group Market Forces said. “The reputations of these companies are now seriously damaged, and that damage will be irreparable if they stick with the climate-wrecking Carmichael project and refuse to rule out future insurance coverage.

Lloyd’s undermines climate targets with $460 million cover for tar sands pipeline

Lloyd’s, Zurich and Munich Re are the biggest underwriters of Canada’s Trans Mountain pipeline, enabling a huge expansion of tar sands oil that would undermine international climate targets, the Unfriend Coal campaign revealed on May 12.

Trans Mountain is pressing ahead with plans to expand its pipeline connecting tar sands in Alberta, one of the highest-carbon sources of oil on the planet, to the Pacific coast, adding 590,000 barrels of capacity per day. More than 120 First Nations and Tribes stand in opposition to all tar sands pipelines crossing their traditional lands and waters.

Trains Mountain’s Certificate of Insurance details the providers of $508 million of liability insurance cover for the 12 months to August 31, 2020, and shows that its biggest backers are European insurers:

  • Insurers on the Lloyd’s market have underwritten $460 million. They are solely responsible for $50 million of cover and have underwritten the rest jointly with other insurers.
  • Zurich has increased its support significantly, despite adopting a policy against insuring tar sands infrastructure last year. It is solely responsible for $8 million of cover and has doubled the cover it provides jointly with other insurers to $300 million.
  • Munich Re developed a policy on tar sands insurance last year. Even so its Canadian subsidiary Temple Insurance remains Trans Mountain’s third biggest insurer providing $250 million of cover with other insurers.
  • Chubb has also increased support significantly since last year, underwriting $185 million with other insurers.
  • Liberty Mutual, Energy Insurance Mutual, AIG, Stewart Specialty Risk Underwriting, W.R. Berkley, HDI Global and Starr are also listed on the Certificate of Insurance.

Lloyd’s declined to comment on its insurers’ support for the Trans Mountain pipeline in a Reuters story. Zurich said it was engaging with fossil fuel companies with the aim to “drive a deeper conversation regarding their credible mid to long-term transition plans”, adding the engagement would not exceed a two-year period. In spite of being listed on the Certificate, HDI Global denied being involved in the pipeline project.

Marsh & McLennan present greenwash at AGM

Under intense pressure for brokering the Adani Group’s Carmichael coal mine in Australia, Marsh was expected to present a climate policy at its AGM on May 21. Yet the world’s biggest insurance broker delivered a mouse in the form of a vague statement of 183 words committing to the UN’s sustainable development goals. Even without any specific criteria the statement should rule out services for the giant Carmichael project. Yet unlike numerous other insurance companies Marsh refused to take a position on Carmichael at the AGM. 

Insurers exposed as sponsors of climate and COVID-19 denial

The US network Fox News has a sorry history of spreading climate denial and disinformation about COVID-19. On May 27, Media Matters for America revealed in a report that in March and April, 43 insurance companies ran more than 3,000 advertisements on Fox News. Allstate, Liberty Mutual, Progressive, and USAA were among the network’s top 10 advertisers during this period.

“It’s simply unconscionable that insurance companies like Liberty Mutual — which claim to be committed to scientific rigor — continue to give Fox News advertising dollars”, commented Annie Leonard, Executive Director of Greenpeace USA. “With Fox doubling down on its dangerous science denial during a global pandemic, Liberty Mutual and other insurers must finally pull their funding.” (See the “Take action” item below.)

Massachusetts state legislators call on Liberty Mutual to ditch fossil fuels

On May 27, 38 Massachusetts state legislators called on Boston-based insurance company Liberty Mutual to stop insuring and investing in the coal and tar sands sectors and to phase out all fossil fuel business in line with a 1.5ºC pathway. 

“Now more than ever, the insurance sector must accelerate the transition to a low-carbon economy by phasing out fossil fuel insurance and investments”, the open letter of the legislators read. “As the fifth largest property and casualty company worldwide, Liberty Mutual is in a unique position to push for an energy transition at a global scale.”

SCOR strengthens divestment from coal

Joining the Net-Zero Asset Owners Alliance, SCOR on May 26 announced that it would no longer invest in any companies which derive more than 10% of their revenue or electricity generation from coal. The French reinsurer also committed to bring its investment exposure to coal to zero by 2030 in the EU and OECD countries and by 2040 elsewhere.

SCOR has ended facultative reinsurance for coal companies but as Reclaim Finance pointed out, continues to offer treaty reinsurance to carriers like Poland’s PZU which actively insure new coal projects. 

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