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Hannover Re divests from coal; continues to reinsure power generation from fossil resources

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World Coal,

Close to half the global reinsurance market has now divested from coal after Hannover Re informed the Unfriend Coal campaign and Urgewald that it has adopted an exclusion policy.

Hannover Re has set a tight threshold, divesting from companies which depend on coal for more than 25% of their revenues. However, it will continue to insure coal power plants, arguing that it is the sovereign decision of governments whether or not to build such projects.

Hannover Re was the world’s third largest reinsurer in 2016, with a 6.7% share of all premiums. The companies which have divested some or all of their assets from coal, including Swiss Re, Munich Re, Hannover Re, SCOR, Lloyd’s, Generali and the Markel Corporation, controlled 45% of the US$257.5 billion global reinsurance premiums in 2016.

According to information received from Hannover Re, the reinsurer actively excludes companies from its investment portfolio that derive more than 25% of annual revenues from thermal coal extraction and power generation. The reinsurer currently has US$63.6 billion in assets under management.

Hannover Re informed the Unfriend Coal campaign that it would “welcome a shift in the energy mix towards alternative energy sources” but would continue to reinsure “the generation of energy from fossil energy resources.” The company argued that it was “not our place, as a private company, to act contrary to the decisions of sovereign nations.”

17 insurers have now adopted divestment policies for assets of more than US$6 trillion and have withdrawn an estimated US$30 billion from the coal sector. Four – Allianz, AXA, SCOR and Zurich – have also decided to limit or stop underwriting coal projects, and Swiss Re has announced that it will prepare such a policy by mid-2018.

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