QBE provides the insurance the fossil fuel projects need to get off the ground and continue operating. The company underwrites dirty projects like oil rigs and coal mines all over the world, and even insures some of Adani’s business in India.
Yet at the same time, QBE is paying out hundreds of millions of dollars every year on extreme weather events, the impacts of which are being made worse as a result of climate change.
Why would QBE support the fossil fuel industry that poses massive financial risks to the company, not to mention the risks faced by humanity?
Join us in calling on QBE to:
- Rule out underwriting any further coal, oil and gas extraction, transportation and infrastructure projects, including Adani Carmichael;
- Divest from fossil fuel assets in its investment portfolio; and
- Advocate publicly and actively for policies that will rapidly reduce carbon emissions and phase out fossil fuel use.
Proudly supporting fossil fuels
QBE might try to avoid publicising its support for the fossil fuel industries nowadays, but just a few years ago it was clearly proud of its role as a major insurer of coal mines – demonstrated beautifully by its 2012 annual report cover featuring a coal mine with the caption “Made possible by QBE”.
A significant part of QBE’s business model involves underwriting large energy projects including offshore oil rigs, gas pipelines and coal mines. Among the many fossil fuel projects it has underwritten, you’ll find projects like the BP Deepwater Horizon, Pemex (which also exploded in the Gulf of Mexico), and Ultracargo in Brazil. The great irony here is that QBE claims to incorporate environmental risks in its approach to underwriting!
On a good day, these projects are digging up more and more carbon that is fueling dangerous global warming. On a bad day, they’re a massive hazard for the environment and human life.
And then there’s the company’s own investments in the fossil fuel industry. While these aren’t publicly disclosed, it’s likely that QBE has significant exposure to fossil fuel assets through its investment portfolio.
QBE’s inaction on climate change is costing them dearly. From 2010 to 2017, QBE’s cost of large risk claims and catastrophes averaged 11.4% of Net Earned Premium; compared to an average of just 8.1% in the seven years to 2010. This significant shift shows just how much the changing climate is impacting QBE’s business.
QBE is in a unique position – if they continue to enable the expansion of the fossil fuel industry through underwriting and investing, they will continue to face the increasing cost of extreme weather events. Green-washing will not address climate change nor the inherent risk in their portfolios. Only serious and rapid change to their business model will.
International insurance companies divesting from coal
International insurance companies restricting their underwriting of coal
- Dai-ichi Life Insurance
- Swiss Re
According to Tom Herbstein of Cambridge University’s insurance project ClimateWise, “climate change fundamentally challenges the existing insurance business model.”
In May 2018 concerned shareholders filed a resolution, calling on QBE to disclose the risks it faces as a result of climate change. Insurance companies were singled out for specific and detailed climate risk disclosure recommendations by the Financial Stability Board’s Task Force on Climate-related Financial Disclosures. The shareholder resolution asked QBE to meet those recommendations.
The resolution, coordinated by Market Forces and co-filed by Local Government Super was considered and voted upon by shareholders at QBE’s annual general meeting on 3 May 2018.
It was backed by 18.6% of shareholders – one of the biggest votes for climate action at an Australian AGM ever. The resolution dominated the meeting as QBE acknowledged it had suffered the financial impact of another horror year for weather catastrophes.
In other good news, QBE also appears to have virtually ruled out any backing for Adani’s climate-destroying Galilee Basin coal mine, at least for now.
While refusing to mention Adani by name, CEO Pat Regan said that QBE generally did not underwrite thermal coal mines in their development phase.
Read more about the AGM here.
- August 2018 – The world’s second-biggest reinsurer MunichRe’s adopted a new policy preventing from doing business with new coal mines or power stations in “industrialised” countries. This means it has ruled itself out of providing reinsurance for Adani’s Carmichael coal project.
- July 2018 – The City and County of San Francisco unanimously passes a resolution to avoid doing business with insurance companies which invest in and insure coal and tar sands companies.
- July 2018 – French insurers Macif and AG2R La Mondiale announce divestment from companies planning new coal-fired power stations.
- July 2018 – Japan’s biggest life insurance company, Nippon Life, announces an end to its funding for coal-fired power stations.
- July 2018 – Swiss Re, the world’s biggest reinsurer, announces it will stop underwriting thermal coal mines, coal-fired power stations or any company that is more than 30% exposed to thermal coal.
- June 2018 – Hannover Re, the third biggest reinsurer worldwide, announces it will exclude coal from its investment portfolio.
- May 2018 – The two largest life insurance companies in Japan announce they are reconsidering their underwriting of coal-fired power stations.
- May 2018 – Shareholder resolution calling on QBE to disclose climate risk achieves one of the highest shareholder votes for a climate resolution in Australia.
- May 2018 – Allianz, the world’s biggest insurance company by assets, announces it will no longer provide stand-alone insurance coverage for coal power plants or coal mines.
- February 2018 – Italian insurer Generali announces plans to divest €2 billion from coal.
- January 2018 – World’s oldest insurance market Lloyd’s of London announces coal divestment due to climate concerns, joining other big UK and European insurance companies, including Aviva, Allianz, Axa, Legal & General, SCOR, Swiss Re and Zurich in ditching coal stocks.
- December 2017 – AXA, one of the world’s largest insurance companies, announced it would divest another Euro 3.1 billion from coal, tar sands and pipeline companies to combat climate change, and would also stop insuring any new coal, tar sands and associated pipeline projects.
- November 2017 – ‘Unfriend Coal’ campaign launches Insurance Scorecard, showing 4 international insurers have restricted coal underwriting (Swiss Re, Zurich, AXA and SCOR).
- February 2017 – APRA Executive Board Member spoke out about the “potentially system-wide” financial risks posed by climate change. According to the regulator, these risks “include the potential exposure of banks and insurers’ balance sheets to real estate impacted by climate change and to re-pricing (or even ‘stranding’) of carbon- intensive assets in other parts of their loan books”. Regulatory guidance has also been provided overseas, with the Bank of England and California state government leading in the area.
- September 2016 – a group of Market Forces volunteers handed out 1000 clap banners to Sydney fans as they headed into the MCG ahead of the team’s preliminary final. Reading “Swans goal” on one side and “QBE quit coal” on the other, the banners were a great way for fans to support their team and call for strong climate action from its major sponsor at the same time.
- May 2016 – Activists gave QBE’s headquarters a colourful new rebranding, illustrating how the insurance company was making climate change possible through its underwriting of major fossil fuel projects. At its AGM later that day, the company faced strong shareholder pressure over its role in the fossil fuel industry.