Since 2021, coal miners, including Adani/Bravus, New Hope and Whitehaven, have complained openly of difficulties securing insurance for their destructive activities. 45 major insurers have ruled out any coverage of Adani’s Carmichael coal mine, and according to Insure Our Future, 41 major insurers have some broader coal exclusion policy in place.
One solution coal miners are working on to overcome this dilemma is setting up an insurance mutual company (Adani even asked for Australian taxpayers to subsidise such a scheme in the lead up to the last federal election). In short, an insurance mutual is an insurance entity owned by its policyholders. With an insurance mutual, coal miners could proceed with building and operating their new coal projects despite not securing insurance through conventional means.
However, not just anyone can run an insurance mutual in Australia, you need an Australian Financial Services (AFS) licence that permits you to operate one. The process for directly obtaining a licence like this is complicated and takes time. Delaying the setting up of the mutual could possibly delay coal projects themselves. Alternatively, the coal miners could find someone with an existing licence to partner with in an attempt to fast track their endeavours.
Due to the likelihood that coal miners are looking to partner with an existing AFS licencee, Market Forces reached out to several licence holders that have the ability to administer an insurance mutual. Almost all of them got back to us to say they would not have their licence used by a coal miner mutual.
One of the licence holders that has not responded, and one that we are particularly concerned about is Australian Broker Network (ABN).
ABN is one of the entities that openly offers services to insurance mutuals. On the 8th of August 2022, ABN updated its AFS licence to include ‘claims handling and settling’ – a crucial element to run an insurance business. We have reached out to ABN Managing Director Tremayne West and asked if ABN would be prepared to assist with a coal miner insurance mutual and have not received a response.
Additionally, Market Forces has received information that indicates ABN member and authorised representative (ie. it operates under ABN’s AFS licence) Criterion Underwriting has played a part in obtaining insurance for the operation of Adani’s disastrous Carmichael coal mine. We have reached out to Criterion Underwriting about this and are yet to receive a response.
The International Energy Agency is clear that any new coal project undermines the net zero by 2050 target and the aim of keeping global warming to no more than 1.5 degrees. Despite the scientific imperative, Adani, Whitehaven and New Hope are all heavily invested in several new coal projects.
Any entity that helps expansionary coal miners find insurance is complicit in the sabotaging of efforts to fight climate change and the fueling of extreme floods, bushfires and heatwaves.
Take action: Contact the Australian Broker Network and call on it to commit to not allowing its licence to be used by the coal companies fueling the climate crisis.
Contact the Australian Broker Network and call on it to commit to not allowing its licence to be used by the coal companies fueling the climate crisis.
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