‘Major Step Forward’: AIG to Stop Insuring Coal, Tar Sands, and Arctic Drilling

Climate justice advocates celebrated Tuesday in response to insurance giant AIG’s announcement that it will no longer invest in or provide insurance coverage for any new Arctic drilling activities nor will it finance or underwrite the construction of any new coal-fired power plants, thermal coal mines, or tar sands projects, effective immediately.

AIG also said that it will immediately stop investing in or underwriting “new operation insurance risks” of coal-fired power plants, thermal coal mines, or tar sands projects owned by corporations that derive 30% or more of their revenue from those industries or generate over 30% of their energy production from coal.

Oil companies denied safety net

“By denying oil companies a safety net for actions that damage a sensitive ecosystem, put the region at risk from spills, and make the climate crisis worse, AIG is both prioritizing a large vital wild space and the health and future of our world,” she added. “Without insurance, you cannot drill for oil, so we hope that other insurance companies will follow the lead of AIG.”

Banks join in

According to Environment America, AIG is also joining “the six largest banks in the United States and Canada’s five largest banks in declining to help oil and gas companies do business in the Arctic.”

I would assume the loss of insurance cover is a big deal. The questions here are how much market share AIG has in this “product” and how much other insurers will raise prices due to AIG’s exit, and how much more lenders would demand in interest and other preferential terms to fund development without these guarantees.

Yves Smith, Naked Capitalism