Insurance – The Green Tau

Green Tau issue 106

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?

Green Tau: issue 88

The climate crisis and insurance companies intersect at three main points.

Climate risks: the risks that insurance companies guard against will include the growing risks associated with extreme adverse weather events. More intense and more frequent floods, wildfires, storms, mud- and landslips will lead to increases in damage to lives and properties. In the short term insurance companies will bear the loss; in the longer term premiums will rise but not necessarily profits.

Underwriting fossil fuel projects: fossil fuel projects – drilling wells, building pipelines, opening mines – need insurance companies who will underwrite the risk of undertaking the project. Ironically these are the very projects that cause climate change and the consequential extreme weather damage for which the insurance companies have to pay out.

Of course insurance companies can be the hero of the day by not underwriting fossil fuel projects and so preventing them from going ahead.

Investing in climate positive or climate negative: to ensure they have sufficient funds to pay out for insurance claims, insurance companies invest the premiums they receive to generate a return. In the past many insurance companies have invested in the fossil fuel industry. This again can be an ironic choice with their fossil fuel investments adding to the climate crisis and thus the size and number of insurance claims being made.

Of course, insurance companies do not have to invest in fossil fuels; there are many other investment opportunities in the renewable energy industry, where profits can be made without damaging the environment.

From 26th February, across the globe, climate activities took part in the week long ‘Insure our Futures’ campaign. The campaign reached out to numerous insurance companies – and groups such as Lloyds of London – inviting them to be the superheroes we need by committing to ensure their company policies exclude the fossil fuel projects that are devastating the world. The campaign was highly creative with dance and song, music and marches and symbolic actions such as forming a human chain around Lloyds of London. Other activists peacefully occupied the offices of key insurance companies whilst passing on information to their staff about the risks of insuring destructive projects such as the East Africa Crude Oil Pipeline (EACOP).

I took part in one such occupation. Eight of us calmly walked into the foyer of 88 Leadenhall Street which houses the offices of Probitas 1492. We sat quietly on the floor such that we were visible to those coming in and out – but not blocking their passage. We remained there for five hours, praying, singing, reading poems, and hearing once again the speech given by Antonio Guterres, the UN Secretary General, in which he spoke of the urgency of tackling the climate crisis using the famous words that we must now act to do ‘everything, everywhere, all at once.’

Throughout our stay the receptionist and the security staff we polite and pleasant – afterwards we gave them a box of chocolates as a thank you. The police presence (a pair of officers) was also polite: our action was not a criminal offence.

Today, 4th March, Probitas 1492, has officially confirmed that they have not and will not insure neither EACOP nor the West Cumbrian Coalmine. For more details – https://christianclimateaction.org/2024/02/28/christians-occupy-probitas-1492-to-ask-them-not-to-insure-fossil-fuel-projects/

Counting on …. Day 1.173

15th September 2023

Yesterday I joined a multi faith group to hand over a letter to Lloyd’s of London asking them to cease insuring new oil projects. Whilst companies such as Lloyd’s finance/ financially enable oil projects, the exploration and production of oil will continue- and indeed will be seen as socially acceptable by the wider public. All parts of the fossil fuel industry need to be challenged and changed, if we as global community, are going to reduce carbon emissions to safeguard the environment.

For the text of the letter see – https://www.quaker.org.uk/documents/lloyds-of-london-faith-letter-2023-04-24 

Count Down

Action 34: Green your insurance. Insurance companies, pension companies and banks are amongst the biggest investors in fossil fuels and related industries – yet it is the continuing use of fossil fuels that is accelerating our climate crisis. It would be far better if our monies were invested in green industries that are and can increasingly actively decarbonise our economy. Switch to a home insurance company that does not underpinning the fossil fuel industry. Check out the Ethical Consumer’s Guide on home insurance: https://www.ethicalconsumer.org/money-finance/shopping-guide/ethical-home-insurance.