Home > Media release: Shareholder resolution at QBE demands an end to fossil fuel masochism
Media Release

Media release: Shareholder resolution at QBE demands an end to fossil fuel masochism

4 March 2019


Monday 4 March, 2019

Tomorrow, shareholders coordinated by Market Forces and publicly listed wealth manager Australian Ethical will lodge a shareholder resolution calling on QBE to set targets for reducing its investment and underwriting exposure to fossil fuels in line with the Paris Agreement goal of limiting global warming to 1.5 degrees.

The resolution follows yet another year of QBE facing higher than average losses from natural catastrophes, and the publication of a Climate Change Action Plan that fails to commit QBE to any reduction in the amount of coal, oil or gas it invests in or underwrites.

“Last year, a shareholder resolution pushed QBE to finally get started on disclosing to investors the risk it faces from climate change. However, disclosure is not enough, QBE also needs to manage and eliminate its climate risks,” said Market Forces campaigner Pablo Brait.

“An obvious step would be to end funding and underwriting of fossil fuels, which cause their own multi-billion dollar losses by fueling extreme weather. While other insurers are restricting their underwriting of coal as an initial response to climate change devastating their bottom lines, QBE’s approach is a clear case of corporate masochism.”

Since 2011 QBE has paid out US$12.2 billion on natural catastrophe and large individual risk claims. This equates to 11.4% of the company’s net earned premium over the period, well above the 8.1% over the 7 years to 2010.

In December 2018 QBE flagged a budget increase for large individual risk and catastrophe claims from $1.2 billion to $1.4 billion for 2019.[1] This followed the insurer reporting a US$1.2 billion loss in 2017, largely due to extreme weather[2] and 2018 catastrophe claims amounting to US$523 million, down on the record-breaking US$1.2 billion from 2017 but still an increase on 2016 claims.

To date, 20 globally significant insurers with more than $6 trillion in assets and representing 20% of global insurance assets have adopted coal divestment policies, including the four largest European insurers. [3] When smaller insurers and partial divestments are included, the total is 25 insurance companies worldwide. Seven major re/insurers (including Allianz, AXA, Swiss Re, Munich Re and Zurich) have restricted underwriting for coal.[4]

“Underwriting or investing in new fossil fuel infrastructure today will warm the planet for decades to come.

Stuart Palmer, Australian Ethical

“It’s encouraging that QBE has the development of some sort of climate metrics and targets by 2021 in its climate plan, but more urgency and clarity is needed,” said Stuart Palmer, Head of Ethics Research at Australian Ethical, which has $2.85 billion in funds under management across superannuation and managed funds.

“Underwriting or investing in new fossil fuel infrastructure today will warm the planet for decades to come. Other insurers and banks around the world have set clear restrictions and targets, recognising the challenges to their business and to society from dangerous climate change. Investors want to see the same from QBE.”

Further comment: Pablo Brait at Market Forces

Notes

  1. https://www.smh.com.au/business/banking-and-finance/qbe-flags-50m-to-100m-profit-headwind- 20181211-p50lez.html
  2. https://www.intelligentinsurer.com/news/qbe-records-1-2bn-loss-for-2017-14687
  3. https://unfriendcoal.com/2018scorecard/
  4. https://unfriendcoal.com/2018scorecard/