AIG Turns Its Back on Climate Commitments and Homeowners
AIG committed to reach net zero emissions, yet it continues to support the fossil fuel industry while abandoning homeowners facing climate risks
By Kerrina Williams
The insurance industry knows more about the impacts of climate change than most people. Despite all the advanced planning and risk assessments available to them, U.S. insurers continue to underwrite and finance the fossil fuel industry that is fueling the crisis. And now we’re seeing regular announcements from companies abandoning consumers in climate vulnerable areas: AIG, Allstate, Farmer’s Group, and State Farm are some of the latest insurers to pull back coverage.
This is a big deal—so big that the Senate Budget Committee recently launched an investigation into insurers’ conduct. The committee sent a letter to insurance giants AIG, Chubb, Liberty Mutual, Starr, Berkshire Hathaway, State Farm, and Travelers questioning their role in the climate crisis and asking them to disclose their coverage of and investments in fossil fuels, as well as their policies on respecting human rights.
The Senate investigation followed a letter from Public Citizen and 140+ organizations calling on insurance companies in the U.S. and abroad to stop insuring methane gas export terminals and liquified natural gas (LNG) facilities. We sent this letter one year after an explosion at Freeport LNG, a liquified natural gas export facility on the Texas coast. Public Citizen uncovered which companies provide insurance to this dangerous and toxic facility: AIG, Liberty Mutual, Chubb, and Starr, among others.
AIG cannot continue to ignore its role in fueling the climate crisis. This is a time to be transparent, intentional, and dedicated to action. Email AIG executives and demand they stop insuring fossil fuels.
Consumers, shareholders, and impacted communities demand answers, yet they’re met with continued silence from AIG’s CEO, Peter Zaffino. At AIG’s 2023 annual general meeting, Zaffino reaffirmed the net zero commitment made last year. But a company that claims to be committed to climate action should stop acting in ways that contradict its pledges. Refusing to insure new fossil fuel infrastructure is a fundamental step to meet climate targets. It’s been over a year since AIG announced its net zero commitment, and it still hasn’t provided any public updates or a plan on how it will reach net zero. Instead, AIG continues to support existing and even new climate-polluting projects.
This year, AIG could show real climate leadership by ruling out underwriting of oil and gas expansion and adopting a policy to respect Indigenous rights to Free, Prior and Informed Consent (FPIC). Instead of following through on its purported commitments, AIG continued to profit off the climate crisis and approved a $50 million bonus for Zaffino. To reward Zaffino a bonus while the insurance industry faces turmoil and the U.S. mounting costs from climate risks that he is fueling is vulgar. AIG’s continued support of fossil fuel projects is a climate risk. A $50 million bonus is equivalent to the 2023 allotment for wildland fire management, how much FEMA designated to federally recognized tribal nations affected by extreme weather in 2022, and almost half of the amount AIG committed to “alternative energy projects” in 2021.
AIG is participating in a vicious cycle of insuring and profiting off fossil fuel projects, rewarding their CEO for these profits, and then abandoning customers facing the harms of climate change.
Just last week, AIG announced it will stop providing homeowner’s insurance in 200 zip codes across the country. AIG knows that climate change is a threat to all of us. Instead of using its power to build a safer world, it has chosen to retreat.
The consequences of continuing to support fossil fuels are becoming starker everyday. Americans face mounting costs related to extreme weather. This month, the East Coast of the U.S. faced health hazards for dangerous air quality from more than 400 wildfires in Canada. These wildfires are fueled by dry warm summers and are a devastating result of climate change.
U.S. insurers have approximately $582 billion invested in fossil fuels. And fossil fuel companies can’t operate without insurance coverage. We can’t let them off the hook. Climate change is here and inescapable for everyone—it can’t be willed away with commitments on paper and no action to back them up.
Together, we can hold AIG accountable.