Home > Revealed: QBE insuring new coal plant construction in Vietnam

Revealed: QBE insuring new coal plant construction in Vietnam

9 June 2022

9 June 2022

A briefing released today by the international Insure Our Future campaign and Korea-based Solutions For Our Climate reveals that Australian insurer QBE is providing insurance for the construction of the Nghi Son 2 coal-burning power station in Vietnam, and the Cebu coal-burning power station in The Philippines.

The data the briefing is based on was obtained by a member of the Korean parliament investigating insurance arrangements for five coal power projects owned or part-owned by KEPCO, Korea’s national power utility company. QBE was the only Australian insurer named in the data.

The contract insuring the construction of Nghi Son 2 was signed in 2018, the year before QBE adopted a policy of not insuring the construction of new coal-burning power stations. It expires in 2023. The polluting Cebu Naga-2 power station in The Philippines began operating in 2011. QBE’s insurance contract with this power station was signed in June 2021 and expires this month. 

Market Forces contacted QBE last month to ask if it will refuse to renew or take on any new policies with Nghi Son 2 and Cebu plants. QBE said it would “adhere” to its policy but, concerningly, didn’t confirm it would exit these projects at the next opportunity. As QBE’s policy only refers to construction of coal plants, Market Forces is concerned QBE is prepared to continue to insure Nghi Son 2 when it begins operating. This example illustrates a significant gap in QBE’s current policy.

KEPCO is a company that has actively undermined global efforts to reduce emissions via the construction of new coal-burning power stations. Providing its coal infrastructure with insurance is inconsistent with QBE’s stated commitment to the goals of the Paris Agreement and net zero emissions by 2050. While QBE may not have yet breached the letter of its coal policy, the spirit of it is another matter.

QBE is already lagging behind its peers which are denying insurance to all new fossil fuel production projects (see below), and now it seems QBE could be willing to keep backing new dirty coal power plants. With the burning of coal fueling the ever-worsening bushfires, floods and heatwaves that are hitting QBE’s profits and driving up customer premiums, the last thing QBE should be doing is making the problem worse.

Additionally, QBE has made much of its joining the Net Zero Insurance Alliance (NZIA) earlier this year, using it as an excuse to continue to underwrite new oil and gas projects while it waits for the NZIA “target-setting protocol” to be released. The commitments QBE has made in joining the NZIA include a commitment to engage with “clients and potential clients, particularly those with the most GHG-intensive and GHG-emitting activities, on their decarbonisation strategies and net-zero transition pathways”. Now that QBE has been outed as a KEPCO insurer, it needs to either cut ties with the polluter, or inform its stakeholders on how it has been engaging KEPCO on its total lack of a credible “transition pathway”.

QBE also a laggard on oil and gas

QBE remains the only Australia-listed insurer willing to insure new oil and gas production projects, with almost no restriction. This position, which undermines QBE’s own stated commitments to the climate goals of the Paris Agreement and net zero emissions by 2050, was most recently challenged by shareholders at its annual general meeting on 5 May 2022.