Major Insurer To Drop Coal-fired Power Plants

Chubb Ltd., the world’s largest publicly traded property and casualty insurance company, announced that it will no longer underwrite the construction and operation of new coal-fired plants or new risks for companies that generate more than 30% 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, the company said.  In addition, Chubb will not make new debt or equity investments in companies that generate more than 30% 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, chairman and CEO of Chubb.  “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.”

Under the new direction, 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 in regions that do not have practical near-term alternative energy sources, and taking into account the insured’s commitments to reduce coal dependence. 

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. 

Chubb will not underwrite new risks for companies that generate more than 30% 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. 

Chubb will not make new debt or equity investments in companies that generate more than 30% of revenues from thermal coal mining or that generate more than 30% of energy production from coal. The coal policy is expected to have a de minimis impact on premium revenues and no impact on investment performance.

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