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The announcement by Suncorp that it will no longer insure new thermal coal projects, along with a similar announcement by QBE Insurance a few months earlier, brings Australia into line with Europe where most major insurers have broken with coal.
US firms have been a little slower to move, but Chubb announced a divestment policy in July, and Liberty has confirmed it will not insure Australia's Adani project.
Firms - America - AIG - Pressure
Other big firms such as America's AIG are coming under increasing pressure.
Even more than divestment of coal shares by banks and managed funds, the withdrawal of insurance has the potential to make coal mining and coal-fired power generation businesses unsustainable.
Chairman - Founder - Adani - Group - Gautam
As the chairman and founder of Adani Group, Gautam Adani, has shown in Queensland's Galilee Basin, a sufficiently rich developer can use its own resources to finance a coal mine that banks won't touch.
But without insurance, mines can't operate.
Insurers - Coal
Why are insurers abandoning coal?
By the nature of their business, insurers cannot afford to indulge the denialist fantasies still popular in some sectors of industry. Damage caused by climate disasters is one of their biggest expenses, and insurers are fully aware that that damage is set to rise over time.
Company - Sides - Street—continuing - Business - Fuel
Even so, a sufficiently hard-headed company might choose to work both sides of the street—continuing to do business with fossil fuel companies, while also writing more expensive insurance against climate damage.
The bigger problem insurers face is the risk of litigation holding fossil fuel companies responsible for climate-related damage. For the moment, this is a potential rather than an immediate risk.
US - Insurer - AIG - Divestment - Policy
As US insurer AIG, yet to announce a divestment policy, has observed: "Based on our monitoring, while the overall volume of litigation activity has increased, past litigation seems to have largely been unsuccessful on numerous grounds including difficulties in determining and attributing fault and liability to a particular company,...
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