Reinsurance News

Fidelis refuses to back Australia’s Carmichael coal mine

15th December 2020 - Author: Matt Sheehan

Specialty re/insurer Fidelis has confirmed that it will rule out underwriting the Adani Carmichael coal project in Central Queensland, Australia, making it the 28th re/insurer to publicly make this commitment.

coal-mine“We are committed to driving forward anti-coal initiatives, we look to shape change by not offering insurance to companies that extract coal or generate energy using coal.” Fidelis said alongside the release of its new sustainability rules.

The refusal removes another possible source of insurance for the controversial Adani thermal coal mine and rail project and puts focus back on the Lloyd’s market, where Adani is currently sourcing its insurance.

In total, 17 companies running Lloyd’s syndicates have now ruled out insuring Adani, including two current insurers (Aspen and Apollo).

“I can confirm that we have declined to offer capacity for any of the Adani construction and operation risks, and have also declined to support non-payment insurance for infrastructure financing for the project,” Fidelis CEO and Chairman Richard Brindle told campaign group Market Forces.

Gallagher Re

“We will continue to be vigilant in ensuring that we do not provide insurance for any coal projects,” he added.

Several large re/insurers – including AXA, SCOR, FM Global, QBE and Suncorp – have explicitly said they will not back the Carmichael project.

And many others – such as Allianz, Munich Re, Swiss Re, Zurich and Generali – have existing climate policies in place that exclude support for the mine.

Pablo Brait, campaigner at Market Forces, commented: “Every insurance company in the world should be running a mile from the climate and reputation-destroying Adani Carmichael coal project. In fact, twenty-eight of them already have.”

“The project will help open up a massive new thermal coal basin in the midst of the climate crisis, it is being contested by Traditional Owners who have not given their consent for the mine, it will destroy endangered species habitat and drain water supplies. Lloyd’s remains one of the few places still willing to insure new thermal coal projects, and that needs to change.”

According to environmental campaign group Unfriend Coal, the number of insurers withdrawing cover for coal more than doubled in 2019 as the industry’s retreat from the sector accelerated and spread beyond Europe.

“At a time when insurance company profits are being hit by global warming-fueled extreme weather, no insurer can claim to be responsible or ethical if it is open to making the problem worse by insuring new thermal coal projects,” Brait continued.

The remaining Lloyd’s syndicates yet to take a position on Adani Carmichael, such as Brit, Convex and Hiscox, must urgently join their peers and rule it out before their reputations are irreparably damaged.”

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