Why insurers must stop fueling climate chaos

Fossil fuel companies can’t operate without insurance. To fight the climate crisis, we must call out all the players.

By Elise Peterson-Trujillo and Hannah Saggau

tl;dr: 

  • Insurers are driving the climate crisis by covering and investing in fossil fuels. 
  • AIG is one of the worst offenders: It’s a top three insurer of oil and gas globally, and one of the few insurers covering multi-billion dollar coal projects.
  • Insurance companies profit off your premiums by investing the money into fossil fuel companies.
  • As the climate damage they’re fueling gets worse, insurers plan to raise prices on you or simply abandon you altogether.
  • We’re telling AIG: Drop fossil fuel coverage, divest, and insure our future instead. Add your name.

The climate crisis is risky business. The past decade has seen increased numbers and intensity of wildfires, tropical storms, and other natural disasters. In 2020, there were a record-breaking 22 billion-dollar weather and climate-related disasters, which cost the U.S. a combined $95 billion in damages.

Climate change puts people, the planet, and property in danger. It’s risky business.

In addition to driving global warming, fossil fuels endanger and pollute communities at every stage of their use, from extraction to combustion.

Thankfully, it’s the job of insurers to help people and businesses manage risk. Those harmed by natural disasters might be able to rebuild, buy a replacement car, and cover the costs of medical care with insurance. Thank goodness for them, right?

Except insurers refuse to cover people who live in areas prone to natural disasters like wildfires and flooding, and property owners in hurricane-prone areas are seeing rising rates on their premiums. And as the climate crisis spreads the risk of natural disasters to more areas and intensifies them, insurers abandon more customers. At the end of the day, they’ll leave taxpayers to pick up the increasingly massive bill. 

Bucking their responsibility to protect us from risk, American International Group (AIG) said it’s not very concerned about paying for worsening climate damage because it can just raise prices or drop coverage — and insurers are also starting to talk openly about getting the federal government to pay for the damage.

But there’s even more to the story: Insurers like AIG are putting people and the planet at increased risk by providing insurance coverage to fossil fuel projects.

Fossil fuel companies can’t operate without insurance — they can’t get projects approved or financed. Despite a $518 billion price tag on damages to insured property from natural disasters in the U.S. over the last decade (compared to $190 billion the previous decade), insurers continue to enable the very projects making those disasters more frequent and more destructive.

In fact, AIG is one of the few remaining insurers able and willing to provide coverage to multi-billion dollar coal projects, and it’s one of the world’s top three oil and gas insurers. Meanwhile other insurers have recognized that climate change poses a threat to their industry: At least twenty-six have ended or limited the insurance they provide to the coal sector. 

AIG must be next: Tell CEO Peter Zaffino to drop fossil fuels.

Among the destructive projects AIG insures is the Trans Mountain pipeline, a massive tar sands oil pipeline in Canada. First Nations peoples are fiercely resisting the expansion of the Trans Mountain pipeline because it harms their communities’ health, violates land rights, and contaminates water sources. 

AIG has also insured the Adani Group’s construction of the Carmichael coal mine in Australia. The Adani project has been met with a powerful resistance movement of Indigenous communities and climate activists calling on insurance companies to cut ties with the destructive project. To date, at least 36 insurers globally have ruled out providing insurance for the mine. AIG appears to have stopped coverage for now, but has refused to rule it out for the future.  

Insuring risky, unnecessary fossil fuel projects is not all the climate damage insurers are responsible for. They also invest policyholders’ premiums back into the fossil fuel industry, enabling more fossil fuel projects. In the case of AIG, it holds around $26.8 billion in fossil fuel investments, based on the most recent data.

Companies responsible for managing risk are putting us all at risk. It doesn’t have to be this way. Tell AIG to change its practices. 

Insurers like AIG have a responsibility to protect the property and lives that they insure. It’s unacceptable that AIG has zero plans to reduce insurance or investments in coal, oil, or gas. Even worse, it plans to keep fueling and profiting off the climate crisis, then abandon its customers when the damage gets too intense.

That’s why Public Citizen and 70+ partners are calling on AIG to:

  1. Immediately stop insuring new and expanded coal, oil, and gas projects.
  2. Stop all insurance coverage for existing coal sector clients.
  3. Phase-out insurance for oil and gas companies, in line with a 1.5°C limit to global warming.
  4. Divest from coal, oil, and gas companies whose businesses are not consistent with a 1.5°C limit to global warming.

Additionally, AIG must:

  1. Commit not to insure the Trans Mountain pipeline and its expansion in advance of August 31, 2021, the deadline for issuers to renew their contracts.
  2. Rule out providing insurance for the Adani Group’s Carmichael coal mine.
  3. Commit to uphold Indigenous rights by denying coverage to projects that do not have the free, prior, and informed consent of impacted communities.

AIG needs to hear from people like you. Sign the petition to tell AIG: Climate change is risky business. Drop fossil fuels. Insure our future instead.