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Businesses call on U.S. insurers to ditch fossil fuel underwriting

Credit: REUTERS/TODD KOROL

A group of about 60 American businesses on Thursday urged their insurers to stop providing coverage to and investing in fossil fuel producers.

By Noor Zainab Hussain

Sept 17 (Reuters) - A group of about 60 American businesses on Thursday urged their insurers to stop providing coverage to and investing in fossil fuel producers.

In a letter, companies including outdoor-gear producer Patagonia and ice-cream maker Ben & Jerry's, a unit of Unilever ULVR.L, called on U.S. insurers to drop ties to coal, oil and gas.

"The insurance industry is underwriting and investing in fossil fuels which we now know are the key drivers of climate change," they said. "As insurance customers, we are therefore expressing our desire for insurance coverage in the U.S. market that isn't tied to supporting fossil fuels and actively supports renewable energy."

U.S. insurers reported almost $7 trillion in cash and invested assets according to the National Association of Insurance Commissioners, which did not break that down by sector.

Insurers highlighted in the letter include American International Group Inc AIG.N, Liberty Mutual LBRTML.UL, Chubb Ltd CB.BN, Axis Capital and Hartford Financial Services HIG.N.

According to the letter, Chubb, Axis Capital, Hartford, and Liberty Mutual have policies to scale back but not halt underwriting of fossil fuels.

In recent years, environmental activists have pressured banks to drop financing for fossil-fuel companies, and called on the finance industry to stop investing in them.

Lobby groups such as Unfriend Coal have also put pressure on insurers to stop underwriting carbon-intensive fuels like coal and oil sands.

Insurance companies can accelerate a transition to a low-carbon economy because having insurance is typically a condition for loans and investment.

The first 10 insurers to exit the coal sector were European, but since March 2019, two U.S. insurers - Chubb and Axis Capital - and two Australian coal insurers have also adopted coal exit policies, according to Unfriend Coal.

Swiss Re AG SRENH.S and Zurich Insurance ZURN.S are the leaders in ending coal insurance, the lobby group said.

(Reporting by Noor Zainab Hussain in Bengaluru; editing by Lauren Tara LaCapra)

((noor.hussain@thomsonreuters.com; Within U.S. +1 646 223 8780; Outside U.S. +91 80 6182 2663 or +91 80 3796 2663 ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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