Monday 2nd May, 2016
As QBE prepares for its Sydney AGM in Sydney on Wednesday, Market Forces has today launched a new campaign calling on the insurance company to stop ‘making climate change possible.’
Activists this morning visited the company’s headquarters in Sydney, to colourfully highlight the company’s role as a major insurer of fossil fuel projects which, by increasing greenhouse gas emissions, drive the sorts of climate impacts that QBE is increasingly paying out on.
Images of damaged coral reef, bushfires and major fossil fuel projects were put up on the QBE headquarters, using the company’s own slogan: ‘Made possible by QBE.’
At QBE’s AGM, shareholders will question the board and executives about the company’s role in underwriting the fossil fuel industry, despite pledges to tackle climate change
“Last month, QBE Group CEO John Neal called on the insurance industry to do more to combat climate change, yet his own company continues to be one of the key pillars supporting the fossil fuel industry,” said Market Forces head analyst, Dan Gocher.
“Shareholders and the QBE Board need to understand how the company is sabotaging itself by underwriting the projects that cause climate chaos, with QBE losing more and more money on extreme weather events.”
According to conservative estimates from Market Forces, QBE earns revenue from the fossil fuel industry of somewhere between $350-400 million per year. Though just how significant the sector is to QBE’s bottom line is unclear, as Energy is wrapped up with Marine and Aviation in its reporting.
Last year, large risk and catastrophe claims cost the firm US$1.35 billion, well down from US$2.35 billion in the disaster-ridden 2011, but well above their long term average prior to 2010. These included a “spate of large individual energy risk claims” suffered by its European Operations in the first half of 2015.
Major payouts for recent weather events include US$144 million for UK storms Desmond, Eva and Frank in late 2015, US$108 million for Cyclone Pam in March 2016 and US$76 million for NSW east coast storms in April.
QBE also asserts it is an active investor in green bonds, but doesn’t disclose the value of these investments. In all likelihood, the amount QBE invests in green bonds is dwarfed by its investments infrastructure and debt and equity of fossil fuel companies.
While QBE claims to incorporate environmental risks in its approach, the reality is their support enables fossil fuel production worldwide, including its expansion through the underwriting of new exploratory drilling.
In general, Australian general insurers are lagging behind their European peers. 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.
Moreover, QBE subsidiaries will soon be required to disclose their investments in fossil fuels to the Bank of England and the California Insurance Commissioner.
“QBE, more than anyone, should understand the risk of climate change and shareholders will undoubtedly be asking why the company continues to support the fossil fuel industry,” said Gocher.
The reality is, should QBE choose to act, it is in a unique and powerful position to genuinely combat climate change and safeguard its own business. But to do so, it must take serious action internally and advocate publicly for comprehensive policy.
Images of the QBE headquarters activity can be found here.
More information available at www.marketforces.org.au/QBE