AXIS Capital reaffirms fossil fuel underwriting, investment commitments
The updated policies are being called an ‘unprecedented step’ for a North American insurer by environmentalist groups.
AXIS Capital Holdings Ltd. has made several updates to its fossil fuel underwriting and investment policies relating to thermal coal, oil sands and the Arctic National Wildlife Refuge as it works to further support the transition to a low-carbon economy, the specialty insurance and reinsurance company reported. The updated provisions go into effect Jan. 1, 2022.
These new commitments include a goal of completely phasing out thermal coal business from its insurance, facultative reinsurance and investment portfolios by 2030 in Organization for Economic Cooperation and Development countries and the European Union and by 2040 globally.
“It is our belief at AXIS that the reinsurance industry needs to move to the forefront of the efforts to transition to a low-carbon economy. Today’s actions reflect the determination and commitment of our team to contribute to positive environmental change,” Albert Benchimol, AXIS president and CEO, said in a release.
Concerning underwriting, AXIS has committed to not provide insurance or facultative reinsurance for:
- New and existing thermal coal plants, mines or their dedicated infrastructure.
- New and existing oil sands extraction or pipeline projects and their dedicated infrastructure.
- Contracts from projects covering the exploration, production or transportation of oil and gas in the Arctic National Wildlife Refuge.
These restrictions apply to companies working in thermal coal, oil sands, or the wildlife refuge that generate 20% or more of their revenue for fossil fuel extraction or production, among other provisions. The company reported exceptions to the policy would be considered on a limited case-by-case basis. Renewals will also be considered on a case-by-case basis until Jan. 1, 2023.
‘Unprecedented step’
The move by AXIS is being heralded as an “unprecedented step for a North American insurer,” according to a release from the Insure Our Future campaign.
“We welcome AXIS Capital’s new commitments on coal as a major win for the climate. By ruling out coal developers and setting out 1.5 degrees Celsius-aligned dates for phaseout of the sector entirely, AXIS Capital has raised the bar for insurers in the U.S. and globally,” Elana Sulakshana, senior energy finance campaigner at Rainforest Action Network, said in a release. “As AXIS ramps up ambition, all eyes are on AIG, Berkshire Hathaway, Travelers and other U.S. insurers that lack any coal restrictions. Furthermore, Chubb, The Hartford and Liberty Mutual should take note and match these best-practice measures, as their coal policies remain riddled with loopholes.”
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