13th May 2025
Insurance Vigils
On Tuesdays, I and one or two others from Christian Climate Action, hold vigils outside one or more insurance companies in the City of London. We do this to both highlight the degree to which the insurance industry supports and enables the expansion of the fossil fuel industry and its carbon emissions, and to bring the presence of prayer into the situation. Today’s vigils were held outside the offices of Marsh McLennan and of Lloyds of London.
How does the insurance industry work? Insurers and their customers identify risks and calculate both the likelihood of the risk materialising and the likelihood cost for the customer of that materialisation. The insurer calculates a fee and in return – once paid – undertakes to pay out to the customer if or when the destructive event happens. The insurer invests the fee to increase its value against the day when it may have to pay up. To spread the risk and the potential cost of the insurance policy, the insurer will approach other insurance companies to share the fee and the risk. Equally the insurer will formulate and sell a wide range of insurance policies, on the basis that each will earn a fee but only a small number will lead to a financial payout by the insurance company.
In the short term (2 years) damages due to extreme climate events is, according to the World Economic Forum, is seen as the second highest risk. Whilst in the long term (10 years) it is seen as the highest risk.
Insurance companies presumably increase premiums to respond to the increasing risks but is there still not a concern that they may underestimate the risk and end up paying out large sums to affected customers? And equally is there a likelihood that in the face of increased premiums customers may cut back on insurance either internalising the risk or cutting back their business plans?
Is there not also something perverse that these same insurance companies may be increasing the climate risks by, 1) investing income from premiums in fossil fuel industries or 2) providing the necessary insurance that enables oil and gas companies to continue to expand production, and thus through the increase
in greenhouse gas emissions, further accelerating the risks of adverse weather events, and the potential liabilities accruing to the insurers.
The best option for customers and the wider public – not to mention biodiversity and the planet – Would be for insurers to stop insuring oil and gas interests.
Yet looking at the be-suited office staff, is this a reality they have even considered? Or do they just place their trust in business as usual?
The Green Tau 