On June 8, United Nations Secretary-General António Guterres declared to the Insurance Development Forum that the insurance and reinsurance industry has “a key role to play” in the future of climate action (Reinsurance News). Now, reinsurance companies—insurers who help share the burden of insurance risks by underwriting primary insurers—are looking for ways to further exclude coal projects from coverage in a new effort to combat the impending climate crisis (Reuters and Insurance Journal).

Many reinsurers took their first steps toward climate preparedness by ceasing to offer bespoke insurance coverage for coal projects. However, most of these companies have continued to underwrite coal investments through “bulk-buy contracts,” which bundle together hundreds of insurers’ policies, making it difficult to disaggregate specific projects. Now, however, some of the world’s largest reinsurance companies are planning to remove this mechanism as well. Swiss Re has been an early actor in this space, and has announced it will fully phase out thermal coal investment coverage from its bulk-buy contracts by 2040 (Reuters and Insurance Journal).

Some observers have noted concerns that this shift will not achieve its desired impact, pointing out that coal projects will seek coverage from smaller reinsurers. But growing climate consciousness in the insurance sector has already begun affecting coal investments. Last month, a rail contractor to a large Australian coal project was forced to ask the Australian government for help obtaining insurance after failing to secure it from the market. Additionally, an American insurance company, AIG, was dropped by a British asset manager for failing to act on climate change (Reuters and Al Jazeera).