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Campaign finds US insurers harder to push away from coal than European peers

A campaign aiming to pressure the insurance sector to stop doing business with the coal industry is finding the task more difficult in the U.S. than its initial push in Europe.

None of the major U.S. insurers have committed to ending underwriting or investments in the coal industry, while seven major European insurers have announced new restrictions on coal underwriting, according to the report "Insuring Coal No More" from the group Insure Our Future.

"We are nearing critical mass where coal may be becoming uninsurable," Peter Bosshard, director of the finance program for the pro-renewables Sunrise Project and an author of the report, said in an interview. "The challenge is that U.S. insurers have so far not joined the trend."

One-third of the global reinsurance market has restricted cover for coal projects, according to the report. Insure Our Future also found that 19 major insurers with more than $6 trillion in assets, or 20% of the industry's global assets, have divested from coal, up from $4 trillion and 13% a year ago.

The group hopes cutting off access to insurance will prevent new coal projects from being financed or built and force most existing coal facilities to close.

While the campaign has reported success pushing major European insurers away from the coal sector, U.S. insurers have an "outsized role" in deciding how quickly the world transitions away from coal, the organization wrote.

"Not only are they not taking action, they're not even interested in even engaging on the subject," Ross Hammond, a senior strategist with Insure Our Future, said in an interview. "It's even more remarkable for me that in the face of massive insurance losses due to climate change … all signs are pointing to alarm bells going off all over the place, and yet somehow the insurance industry in the United States seems to be completely asleep at the wheel."

Hammond said he is confident progress will be made in the coming months as the group, which is the U.S.-focused arm of the international Unfriend Coal campaign, turns up the heat to pressure more U.S. insurers to turn away from the sector.

Willis Towers Watson, a global multinational risk management, insurance brokerage and advisory company, called the movement a "thorn in the side of insurance buyers in the coal sector" in its recent review of the mining industry.

"The risk at this point is that the pressure to exit thermal coal will be further applied to U.S. insurers in the future and potentially trigger a domino effect on other insurers and other types of mining," the Willis Towers Watson report said. "The long-term impacts of President Trump's administration and further [nongovernmental organization] pressures such as 'Unfriend Coal' won't be known for some time, but the next key step to further stabilizing the U.S. coal markets is the next presidential election in 2020."

Insure our Future released a scorecard with the new report ranking 24 of the world's biggest insurers based on their action on coal and climate change. The group reported Asia-Pacific insurers are also lagging behind Europe despite taking "modest action" and noted that Japan's largest life insurance companies have announced they will no longer fund new coal projects.