In a welcome move, Axis Capital and Canopius withdrew their bids for insuring the railway line of the Adani Group’s proposed Carmichael coal mine last week. This brings the number of insurers and financial institutions which have ruled out supporting the Adani project in some way to 16 and 59, respectively.
The latest development is significant for a number of reasons:
- Axis Capital and Canopius responded to public critique by Market Forces and other groups within days. Their swift response confirms that the Adani project is now beyond the pale for responsible financial institutions.
- With Axis Capital and Canopius two specialized insurers without a public brand have withdrawn from the project, and Axis Capital is currently finalizing a coal exit policy. This demonstrates that the Insure Our Future trend has jumped from prominent public brands to smaller specialty insurers.
- Increasingly Insure Our Future organizations like Market Forces are receiving tips from industry insiders about support for Carmichael and other coal projects. This shows that coal, and the Adani project in particular, have lost their social license among insurance professionals.
With Axis Capital and Canopius out of the Carmichael project, all eyes are now on AIG and Lloyd’s.
AIG is one of the biggest remaining coal insurers, has covered Adani Australia and the site works at the Carmichael mine in the past, and has refused to rule out future support for the project. AIG is currently being targeted in petitions by SumOfUs and 350 Aotearoa and will face increased pressure in the months to come.
Lloyd’s doesn’t provide cover directly but offers the infrastructure through which smaller specialty insurers can offer insurance around the world. As the examples of Axis Capital and Canopius indicate, the Adani Group and its broker, Marsh, may increasingly be looking for cover from specialty insurers on the Lloyd’s market as other options have evaporated.
After the Parkland massacre in Florida in 2018, Lloyd’s directed its underwriters to terminate any insurance programs for gun owners they had with the National Rifle Association in the USA. Yet last month the Corporation’s CEO John Neal refused to take similar action in regard to coal.
As quoted by InsuranceERM Neal said: “We expect every syndicate to have its own guidelines on corporate social responsibility in the lines of business they write. Only in exceptional circumstances will we direct the market not to write a certain kind of business.”
The scientific advisors of the recent UN Climate Action Summit have warned that “climate impacts are hitting harder and sooner” than expected and that “growing climate impacts increase the risk of crossing critical tipping points”. It is shocking to see that the Lloyd’s CEO doesn’t appear to consider the risk of an unmanageable climate breakdown, which projects like the Carmichael mine are fuelling, as an exceptional circumstance.
Lloyd’s is currently trying to shake off what the media have described as a “deep-seated culture of sexual harassment”. If the Corporation continues to support cover for the Adani mine and other coal ventures, it may soon distinguish itself as the insurer of last resort for climate-busting coal projects.