Fidelis Insurance Holdings is enforcing extended underwriting guidelines that include new fossil fuel regulations as part of the company’s sustainability obligation.
“The insurance industry has a hugely important role to play in clasping companies to account and making changes happen – but nobody changes unless we are prepared to walk away from activities that are harmful to the climate, people, society, and animals,” said Fidelis group chief manager and chair Richard Brindle.
“We don’t see enough of this yet, but we hope that insurers – and dealers – will increasingly engage with their clients to ensure that the insurance industry is not supporting damaging industry practices.”
According to Fidelis – which halted providing direct insurance for thermal coal plants, projects, and infrastructure in 2020 – its extended guidelines span four umbrella guidelines and six industry-specific actions. The industries are defense & armaments, forestry & agriculture, mining, coal, oil & gas, and nuclear.
Under coal, not only will Fidelis proceed to not directly insure thermal coal mines, power plants, or infrastructure, but it will also only ensure metallurgical coal if there are clear obligations and a timeline for achieving net zero emissions.
Under oil & gas, the guidelines include not directly insuring tar sand extraction, Artic oil & gas research and drilling, and fracking operations.
Fidelis will similarly not security companies whose revenues from the abovementioned activities account for an additional than 20% of total revenues.
Sustainability head Olivia Brindle noted: “Fidelis has a strong obligation to do the right thing, but we also believe that sustainable underwriting is good risk management and that there is a long-term link between ESG (environmental, social, and governance) and achievement.
“A sustainable policy on fossil fuels is key to meeting decarbonization obligations as well as mitigating climate risk, so while we do not have all the answers yet, we know we need to start seizing action today.”
Meanwhile, an approach for treaty reinsurance is being examined, as the guidelines only apply to the insurance business at this point.