Berlin, Munich, May 4th 2020
The world’s second-largest insurance company, Allianz, has released an update to its coal policy. Allianz had already excluded insurance for coal projects – specifically new coal plants and mines – in the past. Based on its updated policy, from 2023 on the insurer now intends to no longer provide property and casualty insurance for companies whose business model is centered around coal and that don’t have a clear phase-out plan.
According to its updated statement on coal-based business models released last week, Allianz’ updated policy will affect companies with a coal share of power production of 25% or above and a coal-fired capacity of at least 5GW. Coal mining companies with a thermal coal share of revenue of 25% and above or a total annual coal production of at least 50 million tons will also be affected by the updated policy. [1]
Allianz’ and AXA’s policies compared
Allianz is catching up with AXA with this move, while not overtaking this time:
- Allianz’ threshold of 25% of generated electricity is more ambitious than AXAs 30%
- However, AXA has a more stringent threshold for coal mining with 20 million tons of annual coal production compared to 50 million tons at Allianz
- Additionally, AXA applies its policy from 2022 on, while Allianz will use its policy only from 2023 onwards
- AXA rules out companies if they plan new coal plants or mines, which is something Allianz doesn't mention in its policy
- Allianz sticks to its end date for coal of 2040 globally, while AXA has the earlier end date of 2030 for OECD countries and 2040 for “the rest of the world” in line with the requirements to reach the Paris goals
- Coal companies like RWE or Uniper would not be able to get coverage from Allianz anymore in 2023, provided they don’t significantly work on concrete fossil phase-out plans of their own
Regine Richter, Energy Campaigner at Urgewald, says:
„This step Allianz has taken is more proof of the fact that coal-centered business models have no future. Two years ago, Allianz excluded project insurance for coal. However, companies with a massive coal share of revenue were still able to get coverage from Allianz. With its updated policy, the insurer is now closing this gaping loophole. While catching up, Allianz is however still not leading on coal exclusions.“
