Chinese insurers Ping An, PICC lag in global coal exit ranking, which looks at investments and underwriting
- A global ranking finds Chinese insurers such as Ping An and PICC score lowly when it comes to exiting insurance cover for coal businesses
- Insured losses from natural disasters reached US$42 billion in first half, highlighting costs of not making progress on global warming targets, study says
Chinese insurers have performed poorly in a global ranking that examines the industry’s approach to fossil fuel exit policies, with Ping An Insurance ranking just 21st among 30 companies assessed with two other Chinese insurers ranking even lower.
“While Chinese insurers recognise the government’s goal on reaching carbon neutrality by 2060, they still have a long way to go in terms of their coal restrictions and exit policies,” said Peter Bosshard, a Switzerland-based director at international NGO The Sunrise Project. He is also one of the co-authors of this year’s report.
Ping An Insurance, China’s largest insurer, ranked 21st in fossil fuel insurance, dropping from 18th spot last year but slightly ahead of the only other two Chinese insurers assessed this year. The People’s Insurance Company of China (PICC) and China Export & Credit Insurance Corp, ranked equal 23rd, among the lowest performers which also included US insurers such as AIG, and insurance companies under the Berkshire Hathaway group.
Ping An Insurance declined to comment on the ranking on Tuesday while PICC did not immediately respond to a request for comment.
The top three performers this year were Allianz, AXA and Axis Capital respectively.
Insurers play a key role in driving the transition to a low-carbon economy. Without insurance, most new fossil fuel projects cannot go ahead and existing ones would be forced to close, according to the Insure our Future report.
Conversely “insurers who are not aligning their business with the Paris Agreement are undermining global climate targets, contributing to mounting economic and social chaos,” the report authors wrote. Insured losses from natural disasters reached US$42 billion in the first six months this year, a 10-year high, according to global insurance broker Aon.
It will divest its bond, equity and other securities investments in companies with over 30 per cent revenue derived from thermal coal and coal-fired power business by the end of 2035. With respect to Ping An’s insurance underwriting, the road map to phase out coal-related projects appears less clear.
“Based on a current assessment of the state’s dependence on coal energy resources, a coal phase-out plan is not realistic in China in the coming decade,” it said in a separate statement on “coal-related business” in 2019. The company added that it would give more consideration to companies with low environmental damage risk and high thermal efficiency.
Since the first scorecard’s publication in 2017, 35 insurers have withdrawn insurance cover for coal-based industries, up from 23 insurers last year.