Chubb Insurance Company Pulls Back From Coal Industry
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It's been a tough week for coal. One of the nation's largest coal companies has declared bankruptcy. More about that in a moment. First, we'll hear about the industry's other major hit - the announcement from the big insurance company Chubb that it's pulling back from the coal business because of climate change. NPR's Jeff Brady reports.
JEFF BRADY, BYLINE: Climate activists are pressuring insurance companies to get out of coal. Coal-fired power plants are some of the biggest emitters of greenhouse gases that contribute to climate change. Elana Sulakshana is with the Rainforest Action Network.
ELANA SULAKSHANA: Without insurance, dirty energy projects like coal-fired power plants and coal mines can't be built or maintained. So we are calling on the insurance industry to stop insuring these projects and also to stop investing in them.
BRADY: The campaign has had more success in Europe. But with Chubb's announcement in the U.S., activists hope other insurers will follow.
MATT PRESTON: The underpinnings of the coal industry are sort of being knocked down.
BRADY: Matt Preston is a coal analyst at the firm Wood Mackenzie. He says insurance is important for coal mining. It's a risky business. Some companies can self-insure, but he says this announcement is another marker in the decline of the U.S. coal industry. Getting into the details of Chubb's announcement, the company says it will not sell policies to companies that generate more than 30% of their income from coal mining, and it will phase out existing policies by year 2022. The company won't say how many policies it has now, only that this won't affect its bottom line.
The Chubb policy also applies to coal power plant construction. That's not a huge deal because there aren't a lot of new ones being built. And it applies to utilities that get more than 30% of their money from coal. Matt Preston says the policy includes an exception.
PRESTON: Even this announcement does give itself an out; it says all these things don't necessarily apply to an area that might not have other alternatives for electricity generation.
BRADY: Preston says the Midwest still relies heavily on coal, so he could imagine exceptions there. But in a lot of places, this just reinforces a trend already underway. Richard McMahon is with Edison Electric Institute, a trade group for investor-owned utilities.
RICHARD MCMAHON: Our companies are really leading the transition to the lower-carbon energy economy, not being harmed by it.
BRADY: He says, over the past decade, his companies reduced their share of coal-fired electricity from about half to less than 30%. He says that's because before insurance companies like Chubb made these demands based on climate change, big investors were pushing utilities to move away from coal. It turns out lower-carbon fuels like natural gas, wind and solar are often cheaper than coal.
Jeff Brady, NPR News Transcript provided by NPR, Copyright NPR.