Activists this morning 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.
Posters bearing the slogan “made possible by QBE”, a company favourite, were put on display outside the building in Sydney’s financial district as staff of the company arrived at work. The posters connected QBE to climate impacts such as coral bleaching, bushfires and major coal mining projects.
Insurance companies, much like banks, play a critical role in enabling fossil fuel projects. But a key difference is that insurers are much more on the front lines of climate impacts, and have to confront the hypocrisy and self-sabotage that comes with underwriting projects and investing in companies that cause them financial pain.
QBE is a perfect example. Over the past five years, QBE has paid out AU$1.29 billion more than it provisioned for extreme weather events. Last year alone, large risk and catastrophe claims cost the firm US$1.35 billion, well above QBE’s long term average prior to 2010. The 2015 total included a “spate of large individual energy risk claims” suffered by QBE’s European Operations in the first half of the year. Yet Market Forces conservatively estimates QBE’s revenue from fossil fuel projects at $350-400 million per year, and in recent years they have enabled many coal and oil projects, including BP’s Deepwater Horizon oil rig, Pemex, which also exploded in the Gulf of Mexico, and Ultracargo in Brazil.
Dan Gocher, Market Forces’ head analyst, said: “QBE needs to understand how the company is sabotaging itself by underwriting the projects that cause climate chaos, which QBE is losing more and more money on through extreme weather.”
QBE has its AGM on Wednesday 4th May and is expected to face pressure from shareholders who want answers as to how the insurer, clearly facing higher and higher costs of covering extreme weather-related disasters, could remain such a strong supporter of projects that fuel climate change.
While Australia’s big three insurers, QBE, IAG and Suncorp, as well as their regulators, seem out to lunch on climate change, action is being taken elsewhere. In Europe, insurance giants AXA and Allianz have already divested their investment portfolios from thermal coal. Reinsurers Swiss Re and Munich Re have published extensive research on the impacts of climate change, and are attempting to shift the industry in the right direction.
We need Australia’s insurers to start taking climate change seriously. Click here to tell them they need to:
- Unequivocally rule out future underwriting of coal, gas and oil production, transport and infrastructure projects;
- Divest from fossil fuel assets in their investment portfolios, and use that money to invest in renewable energy; and
- Take a leading role in the public debate on climate change, calling for action from Australian governments and businesses to limit global warming as much as possible.