Insurer Munich Re hesitant to douse coal business
FRANKFURT AM MAIN: German reinsurance giant Munich Re said it was unsure whether to follow Allianz by ending all activities linked to coal in the name of fighting climate change.
“Before taking any decisions, we want to think very carefully about how (an exit from coal) should be planned, so as to avoid sending any negative signals overall,” chief financial officer Joerg Schneider said in a telephone conference.
“There’s no doubt that burning coal makes a significant contribution to climate change,” he added, “but our role as a business is harder to define.”
Allianz’s Friday announcement that it would stop insuring coal power plants and mines and gradually end investments in coal businesses by 2040 is part of a trend that has picked up in the wake of the 2015 Paris climate agreement.
Insurers are some of the companies most gravely affected by climate change, with financial damage from catastrophes like hurricanes and flooding doubling to 330 billion euros (US$392 billion) worldwide last year, Munich Re estimated in January.
“Even though individual events cannot be directly traced to climate change, our experts expect such extreme weather to occur more often in the future,” board member Torsten Jeworrek said at the time.
The group already has a rule that it does not invest in firms that generate more than 50 per cent of revenue from production or burning of coal.
“Of course we’re also considering whether we ought to get tougher here,” finance chief Schneider said.
Looking to the nearer term, a lower number of disasters in the first quarter spared Munich Re the massive losses seen last year, putting in on track to hit its targets for the year. — AFP