Chubb Limited, the world's largest publicly traded property and casualty insurance company, has adopted a new policy concerning coal-related underwriting and investment.
In a statement, Chubb said that, with the new policy, it no longer will underwrite the construction and operation of new coal-fired plants or new risks for companies that generate more than 30 percent of their revenues from coal mining or energy production from coal. Insurance coverage for existing coal-plant risks that exceed this threshold will be phased out by 2022, and for utilities beginning in 2022, Chubb said.
In addition, Chubb said that it will not make new debt or equity investments in companies that generate more than 30 percent of revenues from thermal coal mining or energy production from coal.
“Chubb recognizes the reality of climate change and the substantial impact of human activity on our planet,” said Evan G. Greenberg, Chubb's chairperson and chief executive officer. “Making the transition to a low-carbon economy involves planning and action by policymakers, investors, businesses, and citizens alike. The policy we are implementing today reflects Chubb's commitment to do our part as a steward of the Earth.”
The following are key provisions of Chubb's new policy:
New coal plant construction and operation. Chubb will not underwrite risks related to the construction and operation of new coal-fired plants. Exceptions to this policy will be considered until 2022 (i) in regions that do not have practical near-term alternative energy sources, and (ii) taking into account the insured's commitments to reduce coal dependence.
Coal mining. Chubb will not underwrite new risks for companies that generate more than 30 percent of revenues from thermal coal mining. Chubb will phase out coverage of existing risks that exceed this threshold by 2022.
Utilities. Chubb will not underwrite new risks for companies that generate more than 30 percent of their energy production from coal. Chubb will phase out coverage of existing risks that exceed this threshold beginning in 2022, taking into account the viability of alternative energy sources in the impacted region.
Investments. Chubb will not make new debt or equity investments in companies that generate more than 30 percent of revenues from thermal coal mining or that generate more than 30 percent of energy production from coal.
Chubb said that it expects its new coal policy to have a de minimis impact on premium revenues and no impact on investment performance.
Learn more: Chubb policy.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].