Major reinsurers have already pulled back from providing bespoke cover for coal projects as part of efforts to meet global climate change commitments, but now comes the hard part - finding ways to exclude coal from bulk-buy contracts, known as 'treaty' reinsurance.
and Lloyd's of London - have already scaled backbespoke coverage for coal projects. But only Swiss Re, in a statement in March, has said it will go further and tighten its treaty reinsurance stance.
Munich Re and Hannover Re told Reuters they are working with their insurance clients to cut their own exposure further. "We want to keep the dialogue and push for change together," said Jean-Jacques Henchoz, chief executive of Hannover Re, though he added that: "It's not happening in a couple of weeks, it's taking a bit of time." Munich Re and Hannover Re said they were working out how to assess what was inside their treaty reinsurance books.
Swiss Re has said it will introduce thermal coal exposure thresholds in its treaty business with insurers as a first step towards full phase-out by 2040, though it has not yet specified the thresholds. "We worked internally with the treaty desks around the world to understand their coal exposures," said Martin Weymann, head of sustainability, emerging and political risk management at Swiss Re. "We took quite a bit of time to filter out which risks are most exposed.
Isabelle Santenac, global insurance leader at EY, however, said that rather than exclusion, the industry should instead use its influence to engage with corporate clients to help them to make the transition more quickly to a greener economy. "If you stop working for those companies, those companies will find another insurer to underwrite that risk, and then you can say 'what has changed for the planet? Nothing'."More from ReutersSubscribe for our daily curated newsletter to receive the latest exclusive Reuters coverage delivered to your inbox.
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