Lloyd's of London and other big European insurers are underwriting almost a third of US coal production despite net zero pledges, with the Lloyd's insurance market emerging as the second-biggest player.
The Insure Our Future campaign group said Lloyd's, Zurich and Swiss Re are among the top 10 insurers of the 25 biggest US coalmines that produced more than 60% of the country's output last year. They underwrite 13 mines, producing 30.7% of U.S. coal.
Coal is the largest contributor of carbon dioxide emissions, and the US is the fourth largest producer of coal worldwide, mining 595m short tons last year, a measure commonly used in the US equivalent to 2,000 pounds.
Even though 45 major global insurers have adopted policies limiting coal underwriting in recent years, the report found that some of them are exploiting loopholes or violating their own policies to continue insuring coalmines.
AIG, the biggest underwriter of US coal, insuring seven mines producing 167m short tons in 2022, 28.1% of the nation's output. Lloyd's of London, which Lloyd's insurers underwriting 10 mines, produced 1,35m short tons, 22.8% of output.
Most of the insurance certificates analysed by the campaign group involving Lloyd's say s of London'or s' firms without naming the firms.
Lloyd's is the biggest insurance firm globally, but it does not enforce or limit the underwriting policies of its 85 market members.
Lloyd's will become net zero as a corporation by 2025, as part of the Net Zero Insurance Alliance, a part of the Glasgow Financial Alliance for Net Zero set up by UN climate envoy Mark Carney. In 2018, the market started divesting from coal, but has been slower than other insurers.
Lloyd's declined to comment on the report, but said its position remained that, as all insurance in the market was underwritten by managing agents, not Lloyd's itself, it is for the individual businesses that operate in the company's market to make their own business and strategy decisions. Lloyd's will offer guidance and oversight to the market.
Zurich's Swiss firm Zurich insures two coalmines producing 4.9% of US output and Swiss Re insures another producing 3%. They were founder members of the Net Zero Insurance Alliance, but left in the spring together with other insurers.
The fear of financial losses caused by increasing amounts of climate-related natural disasters has prompted some insurers to stop insuring homes and businesses in some regions - including entire US states - or drastically raise their premiums. The companies are AIG, Liberty Mutual and Farmers Insurance Group, a company affiliated with Zurich Insurance Group.
The report is based on public record requests for insurance certificates for the 25 largest US mines, producing more than 60% of the country's coal. Europe may well be subscribing to an even greater percentage of US coal production, because they do not cover smaller mines.