Walter Murphy: “Despite the evidence […], the U.S. insurance industry is continuing to support fossil fuel expansion”

Illuminem

May 9, 2024

https://www.linkedin.com/feed/update/urn:li:activity:7194144897501655040/

Walter Murphy charts an unfolding drama that lies ahead for #insurers and #reinsurers #underwriting and #investing in #fossilfuel – in his interview with me.

The average window between billion-dollar climate disasters in the United States has drastically reduced to a mere 20 days.

Interestingly, despite the rising frequency and severity of losses, some of the biggest reinsurers operating in the US market have made record profits. Perhaps a part answer lies in the fact that climate risk prone areas are rapidly becoming #uninsurable.

Walter explains: “U.S. insurers currently have approximately $582 billion invested in fossil fuels, including nearly $90 billion in coal alone.”

“The insurance and reinsurance sectors continue to underwrite fossil fuel projects and continue to invest premiums in fossil fuel companies, thereby exacerbating the #climaterisks (hurricanes, flooding, wildfires, etc.) that directly affect their business. They have and continue to contribute to climate change.”

“As the world accelerates its #energytransition pace to move from a fossil fuel-based to one run by #renewableenergy, Walter tells me, all those fossil fuel assets that the insurance and reinsurance sector continue to hold and finance become highly vulnerable to becoming #strandedassets.”

US Treasury Secretary, Janet Yellen, has expressed alarm at the growing #protectiongap for Americans seeking insurance against property losses. Increasingly the federal government is the one becoming insurer of last resort.

Given this stark reality, can ‘astute’ underwriters, and the rest of ecosystem continue gaming what to and what not to patronize?