The massive insurer is a part of a growing movement finding that fossil fuels are becoming a liability.
The Swiss Re insurance giant has implemented a new policy against covering firms highly reliant on coal. As the world works to eliminate coal power, firms are finding that the move is as good for their bottom line as it is for the environment.
The insurance industry is starting to see many fossil fuels as a type of reliance too risky to cover.
The new Swiss Re insurance coverage policy will refuse to sell to any company that either uses at least 30 percent coal power to maintain its operations or companies that generate at least 30 percent of its revenue from coal power. Industries around the world, including the insurance industry, are seeing coal and certain other fossil fuels as a significant liability.
According to Swiss Re, this change in its insurance coverage strategy reflects a commitment to limiting its impact on global warming. This aligns with the pledge the insurance giant made back in 2015 in order to align itself with the Paris climate accord. That said, beyond being eco-friendly, this move can also be viewed as one that will be friendly to its bottom line.
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Swiss Re insurance acknowledged that it is seeking to “minimize sustainability risks.”
The insurance company explained that aside from keeping up with the environmental promises it has made, there are other reasons for this particular decision. It pointed out that it is using this new policy to “minimize sustainability risks,” according to an Engadget report. Renewable energy and reduced emissions are proving to be better for insurance companies. This simply happens to be a step that aligns with both environmental friendliness and good business sense, according to the company’s strategy.
Moreover, the insurance industry has more to gain long-term, if any controllable contributors to climate change and pollution are reduced. Rising global temperatures increase the risk of property damage from storms and other natural disasters. This leads to more frequent and more expensive insurance claims. Moreover, polluted air and water increase health risks which could make health claims more commonplace and more expensive as well.
Therefore, the Swiss Re insurance strategy may prove to be a positive one for itself both presently and in the future. The company has also been investing in wind and solar power in order to help keep risks further mitigated.