Chinese insurers rank at the bottom of industry’s progress in phasing out support for fossil fuel

PICC and China Export & Credit Insurance Corp came in last, while Ping An ranked 22nd on a list of 30 companies assessed by global NGO coalition Insure Our Future
A total of 41 insurers have withdrawn or reduced insurance cover for coal-based industries since the first report was published in 2017, up from 35 in 2021 and 23 in 2020

Business of climate change

Martin Choi

Published: 7:30am, 19 Oct 2022

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Chinese insurers were among the worst performers in a global study examining the industry’s progress in phasing out support for fossil fuel.

Ping An Insurance, China’s largest insurer, ranked 22nd among 30 companies, while People’s Insurance Company of China (PICC) and China Export & Credit Insurance Corp rounded off the bottom of the table.

The report published by Insure Our Future, a global NGO coalition, focuses on the 30 most important insurers in the power sector worldwide, ranking them according to their policies on coal, oil and gas insurance, as well as their overall approach to exiting fossil fuel.

Insurance companies play a crucial part in reducing fossil fuel production and limiting global warming to the key threshold of 1.5 degrees Celsius. Without insurance, most new fossil fuel projects cannot proceed, and existing ones must close, according to the report.

Ping An Insurance ranked 22nd among 30 insurance firms that were assessed for their policies on coal, oil and gas insurance, as well as their overall approach to exiting fossil fuel. Photo: Shutterstock

“Insurance is the Achilles heel of the fossil fuel industry and has the power to accelerate the transition to clean energy,” said Peter Bosshard, global coordinator of the Insure Our Future campaign and main author of the Scorecard in the report.

Coal has become increasingly uninsurable outside China, and most large insurers around the globe have backed away from insuring new coal projects, according to the report. A total of 41 insurers have withdrawn or reduced insurance cover for coal-based industries since the first scorecard’s publication in 2017, up from 35 last year and 23 the year before.

Bosshard said that most international insurance companies have moved away from covering new coal power plants.

“Leading international insurers like Allianz, Munich Re and Swiss Re have committed to no longer insure new oil and gas extraction either and Chinese insurers should follow their example,” he said. “They [Chinese insurers] should not replace cover for coal with new oil and gas projects but should position themselves as leaders in the global clean energy transition.”

President Xi Jinping pledged in September 2021 at the United Nations General Assembly that China would no longer build new coal-fired power plants abroad, following from the country’s commitment a year earlier that it would reach carbon neutrality by 2060.

However, China’s investments in coal-based power, iron and steel capacity accelerated in the first half of the year, putting the country’s commitments to decarbonise its economy at risk, according to a joint report from climate non-profit organisations the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) in late September.

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Ping An Insurance dropped to 22nd on the list from 21st last year.

PICC and China Export & Credit Insurance Corp were jointly ranked 26th at the bottom of the table, along with US insurers Berkshire Hathaway and Starr Insurance. This group “has not taken any steps to restrict their underwriting or investments in fossil fuels”, according to the report.

Ping An Insurance declined to comment on the ranking. In January, the insurer’s parent company Ping An Group issued a policy statement on its coal-related business, saying it would “try its utmost to cooperate with coal companies and coal-fired electric power companies in environmental optimisation projects, without hurting society and people’s livelihood”.

PICC, China Export & Credit Insurance, Berkshire and Starr did not immediately respond to requests for comment.

“Insurance companies can’t be expected to absorb the growing costs of climate disasters alone, but it is unacceptable that they are abandoning climate-affected communities while continuing to fuel the climate emergency by underwriting the expansion of fossil fuel production,” said Elana Sulakshana, senior campaigner at San Francisco-based Rainforest Action Network in a statement.

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