REPS. HUFFMAN AND JONES CALL OUT U.S. INSURANCE COMPANY FOR INVESTING IN FOSSIL FUEL PROJECTS DESPITE CLIMATE RISKS

While Insurance Companies Have Been Funding Fossil Fuel Expansion Projects, They Have Been Hurting Consumers by Scaling Back Services and Raising Costs in Communities Most Affected by Climate Change

April 27, 2022

REPS. HUFFMAN AND JONES CALL OUT U.S. INSURANCE COMPANY FOR INVESTING IN FOSSIL FUEL PROJECTS DESPITE CLIMATE RISKS 

While Insurance Companies Have Been Funding Fossil Fuel Expansion Projects, They Have Been Hurting Consumers by Scaling Back Services and Raising Costs in Communities Most Affected by Climate Change

 

Text of Letters (PDF)

 

WASHINGTON, D.C. — Today, U.S. Representatives Jared Huffman (D-CA) and Mondaire Jones (D-NY), along with 14 colleagues, called out U.S. insurance companies for continuing to invest in fossil fuel expansion projects despite the risks the projects pose to the country's economic stability and furthering the climate crisis. In letters to 13 of the top U.S. insurers — American Insurance Group, Chubb, Berkshire Hathaway, Liberty Mutual, Travelers, The Hartford, Starr Insurance Companies, W.R Berkley, FM Global, Markel, Skyward Specialty Insurance, Lincoln, and Great American Insurance Group — the lawmakers raised concerns that the continued investment in fossil fuels by insurance companies runs counter to the scientific consensus on the growing climate crisis. The lawmakers are urging these companies to fully consider the environmental, economic, and financial risks of climate change before underwriting fossil fuel projects. 

“At present, the insurance industry profits from the expansion of fossil fuels while ripping the rug out from under the communities most affected by climate change. Continued investment in the expansion of fossil fuels stands in direct contradiction to the scientific consensus and the United States’ obligations under the Paris Climate Agreement. It also harms communities on the front lines of the climate crisis and threatens financial stability at large. We urge you to consider the full impact of your continued support for fossil fuel expansion,” wrote the lawmakers.

“Insurance companies are meant to protect us from catastrophic risks, but the industry’s ongoing support for fossil fuel expansion puts the communities they serve and our planet in peril,” said Deanna Noël, climate campaign director at Public Citizen. “U.S. insurers continue to lag behind their global counterparts by refusing to rule out support for new oil and gas, even as companies like Chubb and Liberty Mutual are dropping coverage for some California homeowners at risk of climate-driven wildfires. This trend will only get worse if the insurance industry continues to enable new oil and gas projects. Anything short of an end to fossil fuel expansion is a slap in the face to future generations and further diminishes our ability to avert climate catastrophe.”

Elana Sulakshana, Senior Energy Finance Campaigner at Rainforest Action Network, said: “Despite the intensifying impacts of wildfires, floods, and other climate change-fueled natural disasters on communities around the world, U.S. insurers have fallen starkly behind their global peers when it comes to taking responsibility for their central role in the fossil fuel economy. While leading global peers are exiting the coal sector and restricting underwriting for new oil and gas projects, Chubb, Liberty Mutual, Travelers, and other U.S. insurers continue to provide a lifeline to the coal industry and underwrite the buildout of oil and gas infrastructure that the climate cannot afford.”

“Insurance companies must understand that backing dead end fossil fuel development is as bad for business as it is for our families and the animals and resources we depend on to survive. Climate change already impacts Indigenous Peoples at a greater rate than the rest of the world, and we will never stop using our strength and our voices to protect every being and element that feeds our bodies and spirit,” said Bernadette Demientieff, Executive Director of the Gwich’in Steering Committee. “It’s time for every insurance company to ensure the rights of the Indigenous Peoples and wildlife who rely on the Arctic Refuge for survival instead of insuring oil drillers who will destroy this sacred place.” 

Helen Humphreys, Communications Coordinator at Connecticut Citizen Action Group, said: “Hartford Connecticut is known as the insurance capital of the world. Our state plays host to a number of large U.S. insurers, including Travelers and The Hartford. However, these insurers are failing to protect the very communities they operate in by investing in and underwriting climate-destroying fossil fuel projects. Our planet is sending urgent warnings: record breaking temperatures, more extreme storms, historic droughts, flooding and sea level rise. Climate activists from all over Connecticut have been urging these companies for years to stop propping up the fossil fuel industry. But we have only been met with greenwashing and solutions that fall short. We cannot afford to wait any longer - Travelers and The Hartford must take real action and stop risking our residents' future.” 

The Intergovernmental Panel on Climate Change (IPCC) and the Biden administration have warned that keeping the global temperature rise below 1.5°C is critical to avoiding a catastrophic climate crisis in our communities. Yet, U.S. insurers are well behind their global peers on mitigating climate risk and continue to finance new fossil fuel projects in the face of warnings that such projects could raise temperatures above the 1.5°C threshold. 

No U.S. insurance company has adopted comprehensive restrictions on underwriting and investments in fossil fuel expansion, including coverage restrictions for new oil and gas production projects. Only five U.S. insurers have restricted underwriting and investments in coal and only three U.S. insurers have restricted underwriting in tar sands. Meanwhile dozens of global insurance companies have made commitments to restrict investment in these types of projects. 

Reps. Huffman, Jones, and their colleagues also called out U.S. insurers for investing in fossil fuels to rake in profits while they scale back services and pass climate related costs onto consumers. Companies like AIG, Chubb, and Liberty Mutual continue to fund fossil fuel expansion projects while cutting services in wildfire-prone areas in California. The lawmakers are concerned that this pattern will continue in communities most affected by increased storms, flooding, and fires due to climate change. 

In addition to Reps. Jones and Huffman, the letters were signed by U.S. Representatives Ritchie Torres, Jesús G. “Chuy” García, Marie Newman, Andy Levin, Nanette Diaz Barragán, Mark Takano, Rashida Tlaib, Jamaal Bowman, Ed.D., Cori Bush, Eleanor Holmes Norton, Alan Lowenthal, Alexandria Ocasio-Cortez, Sheila Cherfilus-McCormick, and Adam B. Schiff.

Congressman Huffman has been a leader in the effort to end the financing of the fossil fuel industry to address the climate crisis. Last year, he introduced the Sustainable International Financial Institutions Act of 2021, which would tackle the problem of international financial institutions helping to finance fossil fuel projects that are accelerating climate chaos. In 2020, he led 32 colleagues in sending a letter to five of the largest U.S. banks urging them not to provide financing for oil drilling and development in the Arctic National Wildlife Refuge.