Insuring a safe climate?

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Just like the big banks, general insurance companies play a pivotal role in enabling fossil fuel expansions. They do this by providing the insurance that allows big fossil fuel projects to get off the ground and keep operating. Insurers also invest in fossil fuel companies through their considerable share portfolios.

Despite the extreme weather fueled by global warming hitting insurance company profits and threatening their entire business model, here in Australia all three major insurers (IAG, Suncorp and QBE) continue to support fossil fuels in some way:

  • QBE is still willing to provide insurance to all oil and gas projects and Suncorp is willing to do so for gas pipelines and gas-burning power stations (Suncorp will not underwrite new oil and gas extraction and exploration, phasing out oil and gas production and exploration exposure by 2025). Both insurers have committed to not insuring new thermal coal projects and phasing out their thermal coal exposures in both underwriting and investments by 2025 and 2030 respectively.
  • IAG won’t provide insurance for all fossil fuel extraction or coal-fired power by 2023, but is still invested in these dirty industries and is still open to underwriting gas-fired power and gas pipelines.

For more detail see our “where does your insurer stand” table below.

In case these company names are unfamiliar, please note IAG and Suncorp market themselves under various brands including:

  • IAG: NRMA, RACV, CGU, SGIO
  • Suncorp: AAMI, GIO, APIA, Just Car

Australia’s big insurance companies are making extreme payouts on extreme weather, but are still invested in the fossil fuel industry that is making climate change worse.

While all three of Australia’s major general insurers, IAG, QBE and Suncorp have taken steps to reduce their fossil fuel underwriting and investments, we’re asking them to finish the job by:

  • Ruling out underwriting (insuring) all new oil and gas extraction, transportation and infrastructure projects and set dates to phase out undewriting exposure to oil and gas entirely;
  • Divest from fossil fuel assets in its investment portfolio;
  • Advocate publicly and actively for policies that will rapidly reduce carbon emissions and phase out fossil fuel use; and
  • Educate customers about the effects of climate change on premiums, and participate in risk mitigation measures.
Find out more below:
INSURER OWNED BY FOSSIL FUEL INVESTMENTS FOSSIL FUEL UNDERWRITING (INSURING)
1st for Women Auto and General Auto and General has been contacted regarding its fossil fuel policies and has yet to reply. Auto and General has been contacted regarding its fossil fuel policies and has yet to reply.
AAMI Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030).
Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Allianz Allianz Does invest in oil and gas companies. Has the following restrictions on coal investments: Allianz does not invest in companies that derive more than 30% of revenue from coal mining, generate over 30% of their energy from coal or are planning over 0.5GW of thermal coal capacity additions. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants or coal mines, but can still provide cover for coal companies for now. All insurance related to coal will be gradually phased out by 2040. Does underwrite oil and gas companies and infrastructure.
AM&T Allianz Does invest in oil and gas companies. Has the following restrictions on coal investments: Allianz does not invest in companies that derive more than 30% of revenue from coal mining, generate over 30% of their energy from coal or are planning over 0.5GW of thermal coal capacity additions. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants or coal mines, but can still provide cover for coal companies for now. All insurance related to coal will be gradually phased out by 2040. Does underwrite oil and gas companies and infrastructure.
Apia Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Asteron Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Bingle Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Budget Auto and General Auto and General has been contacted regarding its fossil fuel policies and has yet to reply. Auto and General has been contacted regarding its fossil fuel policies and has yet to reply.
CGU IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years.
Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
CIL Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Club Marine Allianz Does invest in oil and gas companies. Has the following restrictions on coal investments: Allianz does not invest in companies that derive more than 30% of revenue from coal mining, generate over 30% of their energy from coal or are planning over 0.5GW of thermal coal capacity additions. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants or coal mines, but can still provide cover for coal companies for now. All insurance related to coal will be gradually phased out by 2040. Does underwrite oil and gas companies and infrastructure.
Coles IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
GIO Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Huddle Huddle Does not invest in coal, oil or gas companies Does not insure coal, oil or gas infrastructure or companies
IAG (Insurance Australia Group Limited) IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
InsureMyRide Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Just Car Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Legal & General Legal & General Invests in coal, oil and gas. While it doesn’t have a divestment policy, it has started naming, shaming and divesting from what it considers “climate laggards”. Does not insure coal, oil or gas infrastructure or companies.
Lumley IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
NRMA IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
Ozicare Auto and General Auto and General has been contacted regarding its fossil fuel policies and has yet to reply. Has been contacted regarding its fossil fuel policies and has yet to reply.
QBE QBE Invests in oil and gas companies. Has set a target to withdraw all direct investment in thermal coal companies (that generate over 30% of revenue from coal or generate over 30% of electricity generation with coal) by 1 July 2019, and introduce a 0.5% limit on indirect investment (e.g. index funds) thermal coal exposure. Does insure oil and gas infrastructure and companies. From 1 July 2019 QBE will refuse to insure new thermal coal mines, power stations and transport networks. It will phase out its entire thermal coal underwriting (insurance) business by 2030.
RACV IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
SGIC IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
SGIO IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
Shannons Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Suncorp Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Swann IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
Terri Scheer Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Territory Insurance Office Allianz Does invest in oil and gas companies. Has the following restrictions on coal investments: Allianz does not invest in companies that derive more than 30% of revenue from coal mining, generate over 30% of their energy from coal or are planning over 0.5GW of thermal coal capacity additions. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants or coal mines, but can still provide cover for coal companies for now. All insurance related to coal will be gradually phased out by 2040. Does underwrite oil and gas companies and infrastructure.
Tyndall Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Vero Suncorp Has set targets to phase out direct thermal coal investments by 2025 and direct oil and gas producer and exploration company investments by 2040 (with most polluting 10% divested immediately, most polluting 25% by 2025 and most polluting 50% by 2030). Will no longer insure new thermal coal or oil and gas production and exploration projects and will phase out its entire thermal coal and oil and gas production and exploration exposure by 2025. No restrictions on oil and gas pipelines or gas-fired power stations.
Virgin Money Auto and General Auto and General has been contacted regarding its fossil fuel policies and has yet to reply. Auto and General has been contacted regarding its fossil fuel policies and has yet to reply.
WFI IAG Invests in coal, oil and gas companies. While IAG doesn’t have set targets for the carbon intensity of its investment portfolio, this measure has been falling consistently over the last three years. Will phase out the insurance of all fossil fuel extraction and production and coal-fired power by 2023. Policy doesn’t say anything about gas-fired power or gas pipelines.
Youi Youi Has not responded to inquiries regarding investments Does not insure coal, oil or gas infrastructure or companies

Australia’s insurers need to get their house in order


Regulators, including APRA here in Australia, have started to wake up to “potentially system-wide” financial risks posed by climate change. They are calling on the insurance industry to take its rightful position as a leader in public discussion on the issue.

According to Tom Herbstein of Cambridge University’s insurance project ClimateWise, “climate change fundamentally challenges the existing insurance business model because it is rendering actuary analysis in many places obsolete.”

In 2018 IAG and the NZ Reserve Bank warned the effects of climate change will render huge swathes of the globe uninsurable. The same warning was made specifically for Townsville after its record-breaking floods in February 2019. According to Munich Re, during the three decades to 2012 Australian weather-related insurance losses rose fourfold. The world’s largest reinsurance company warned in March 2019 that global warming, fueled by the fossil fuel companies that Suncorp and QBE currently underwrite, is on track to make insurance unaffordable for low and average income earners in some regions, causing serious economic and social disruption.

The trend is clear. Without significant and urgent action in both climate change mitigation and adaptation, insurers face shrinking markets and growing and less predictable natural catastrophe claims.

Thanks to customer, shareholder and general community pressure, insurance companies are finally starting to shift away from supporting coal, oil and gas. QBE ended its underwriting of new thermal coal projects in 2019 and will phase out its entire thermal coal business by 2030. Suncorp has also committed to end its underwriting of new thermal coal, new and additional oil and gas production and exploration and will phase out all thermal coal and oil and gas production and exploration exposure by 2025 and has set targets for the phase-out of direct investments in thermal coal and oil and gas production and exploration. IAG has committed to phase out all fossil fuel extraction and coal-fired power underwriting by 2023. IAG is also reducing the carbon intensity of its investment portfolio, but lacks targets for this metric.

In addition, after being missing in action on global warming for years, the Insurance Council of Australia, the peak body for the three big Australian insurers, has begun to criticise government inaction on the climate emergency. However, if the Insurance Council and its members want credibility on the issue, they need to urgently put in place plans for entirely phasing out their support for fossil fuels.

For more information on the insurance industry’s climate policies globally, see the Insure Our Future website.

“A +4°C world is not insurable. As a global insurer and investor, we know that we have a key role to play.”Thomas Buberl, AXA CEO

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