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 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 (except new tar sands projects and some Arctic oil), and will only start restricting its oil and gas insurance in 2030. It has stopped providing insurance to new thermal coal projects (mines, power stations and transport networks) and will phase out thermal coal underwriting and investment by 2030.
  • Suncorp is still willing to underwrite new gas pipelines and gas-burning power stations but it will not underwrite new oil and gas extraction and exploration and phase out oil and gas production and exploration exposure by 2025. It is also committed to not insuring new thermal coal projects and phasing out its thermal coal exposures in both underwriting and investments by 2025.
  • 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 & General Auto & General doesn’t invest in companies operating in the fossil fuel sector. "Auto & General doesn’t underwrite commercial insurance products, and thus it doesn’t provide insurance for companies operating in the fossil fuel sector."
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 Has the following restrictions on coal investments: does not invest in coal-based infrastructure as well as companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. As of 1st of January 2023, Allianz will not invest in new oil and gas fields, new oil power plants, and new midstream oil infrastructure. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants, thermal coal mines, or other coal infrastructure projects.  From 2023, will no longer insure companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. All insurance related to thermal coal will be gradually phased out by 2040. Insurance for tar sands projects and companies with more than 10% revenue from tar sands is prohibited. As of 1st of January 2023, Allianz will not insure new oil and gas fields, new oil power plants, new midstream oil infrastructure, and as of 1st of July 2023 will not renew existing contracts for such projects.
AM&T Allianz Has the following restrictions on coal investments: does not invest in coal-based infrastructure as well as companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. As of 1st of January 2023, Allianz will not invest in new oil and gas fields, new oil power plants, and new midstream oil infrastructure. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants, thermal coal mines, or other coal infrastructure projects.  From 2023, will no longer insure companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. All insurance related to thermal coal will be gradually phased out by 2040. Insurance for tar sands projects and companies with more than 10% revenue from tar sands is prohibited. As of 1st of January 2023, Allianz will not insure new oil and gas fields, new oil power plants, new midstream oil infrastructure, and as of 1st of July 2023 will not renew existing contracts for such projects.
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 Direct Auto & General Auto & General doesn’t invest in companies operating in the fossil fuel sector. "Auto & General doesn’t underwrite commercial insurance products, and thus it doesn’t provide insurance for companies operating in the fossil fuel sector."
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 Has the following restrictions on coal investments: does not invest in coal-based infrastructure as well as companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. As of 1st of January 2023, Allianz will not invest in new oil and gas fields, new oil power plants, and new midstream oil infrastructure. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants, thermal coal mines, or other coal infrastructure projects.  From 2023, will no longer insure companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. All insurance related to thermal coal will be gradually phased out by 2040. Insurance for tar sands projects and companies with more than 10% revenue from tar sands is prohibited. As of 1st of January 2023, Allianz will not insure new oil and gas fields, new oil power plants, new midstream oil infrastructure, and as of 1st of July 2023 will not renew existing contracts for such projects.
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.
Oceania Insurance Auto & General Auto & General doesn’t invest in companies operating in the fossil fuel sector. "Auto & General doesn’t underwrite commercial insurance products, and thus it doesn’t provide insurance for companies operating in the fossil fuel sector."
Ozicare Auto & General Auto & General doesn’t invest in companies operating in the fossil fuel sector. "Auto & General doesn’t underwrite commercial insurance products, and thus it doesn’t provide insurance for companies operating in the fossil fuel sector."
QBE QBE Invests in oil and gas companies and has no plans to divest until 2050. 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. Will stop insuring new tar sands projects from 2022 but no restrictions on insuring any other oil and gas infrastructure and companies until 2030. QBE refuses 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 Has the following restrictions on coal investments: does not invest in coal-based infrastructure as well as companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. As of 1st of January 2023, Allianz will not invest in new oil and gas fields, new oil power plants, and new midstream oil infrastructure. Will no longer provide stand-alone insurance coverage for the construction and operation of coal-fired power plants, thermal coal mines, or other coal infrastructure projects.  From 2023, will no longer insure companies that derive more than 25% of revenue from thermal coal mining, generate over 25% of their energy from coal, are planning new coal, or have over 5GW of thermal power plant capacity installed or mining more than 10 million tonnes thermal coal annually. All insurance related to thermal coal will be gradually phased out by 2040. Insurance for tar sands projects and companies with more than 10% revenue from tar sands is prohibited. As of 1st of January 2023, Allianz will not insure new oil and gas fields, new oil power plants, new midstream oil infrastructure, and as of 1st of July 2023 will not renew existing contracts for such projects.
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 Bank of Queensland BOQ is still exposed to companies involved in the extraction of fossil fuels ($16.4mil lent as of 31 August 2020). However, it has committed to not provide such finance moving forward and says it will reduce the $16.4m of fossil fuel finance arrangements to zero by the end of 2024. It also clarified that: "BOQ has no exposure to coal-fired power generators and has no appetite for lending to this sector." "Auto & General is the underwriter of Virgin Money Car and Home & Contents Insurance in Australia. Auto & General doesn’t underwrite commercial insurance products, and thus it doesn’t provide insurance for companies operating in the fossil fuel sector."
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 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. However, more works needs to be done and they need to go further, as we outline above.

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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