Advisen

The Hartford, Liberty Mutual join 17 other insurers, reinsurers in divesting from coal

By Erin Ayers, Advisen

The Hartford Financial Services Group announced its decision to stop underwriting any organizations that draws over 25 percent of its revenue from coal mining, joining a growing number of insurers that have taken stances against industries with negative environmental impacts.

“The world needs affordable, accessible energy to support global economic progress and, at the same time, action is needed to mitigate the impact such activity has on our climate,” said The Hartford’s Chairman and CEO Christopher Swift. “Extreme weather affects people’s lives and businesses – and the risks are getting worse. As an insurer and asset manager we recognize the growing cost of this crisis, and we’re determined to use our resources and influence to address the challenge.”

The Hartford said it will not underwrite or invest in the construction or operation of new coal-fired plants or from companies that generate more than 25 percent of revenue from oil extraction from tar sands.

The Hartford’s move follows a similar one from Liberty Mutual, which announced that it would not insure or invest in new coal projects going forward and would phase out existing coal-related risks by 2023. Liberty Mutual also appointed its first chief sustainability officer, Francis Hyatt, to lead environmental, social, and governance (ESG) initiatives.

"We understand the shift from coal to clean energy is a journey and we recognize the role the insurance industry plays in supporting that evolution for our customers. Now more than ever it’s crucial that companies take an active role in advancing their ESG agendas, and I look forward to partnering with internal and external stakeholders around the world to help drive positive impact in society,” said Hyatt in a statement.

The two New England-based insurers join 17 other insurers and reinsurers globally that have divested from coal projects, according to a recent tally from “Unfriend Coal,” an initiative that declares its mission as “making coal uninsurable.” Insurers have the ability to effect positive social change by refusing to insure coal, the group says. Unfriend Coal recently demonstrated outside of Liberty Mutual’s Boston offices to urge more action on environmental concerns.

“The role of insurers is to manage society’s risks – it is their duty and in their own interest to help avoid climate breakdown. The industry’s retreat from coal is gathering pace as public pressure on the fossil fuel industry and its supporters grows,” said Peter Bosshard, coordinator of the Unfriend Coal campaign.

Unfriend Coal cited Swiss Re and Zurich as leaders in backing away from coal, noting that SCOR, AXA, AXIS Capital, Generali, QBE, Allianz, Chubb, Hannover Re, HDI Global, Aviva, Munich Re, Mapfre and Ping An have also made strides. The number of insurers divesting from coal doubled in 2019, the group announced.

Editor Erin Ayers can be reached at eayers@advisen.com.