French insurer Axa extends climate change policy to XLPosted On: Nov. 26, 2018 8:17 AM CST
(Reuters) — Axa SA, France’s biggest insurer, extended its climate change policy to its recently acquired XL division, which will result in a negative impact on its revenue.
Axa said XL will stop insuring projects related to the construction of coal-fired power plants and the extraction of tar sands.
The move will mean a revenue loss of about €100 million ($114 million) for XL, which would mainly occur in 2020.
“€100 million is a lot of money but, when you take into account Axa’s world revenue, this is something we can absorb in terms of activity growth,” said Jad Ariss, Axa’s head of public affairs and corporate responsibility.
Axa reported annual group revenues of €98.6 billion for 2017.
Bermuda-based XL Group Ltd., bought by Axa earlier this year in a $15 billion deal, mainly handles property/casualty insurance in the United States.
A number of European insurers and banks have committed to pull back for most polluting industries under pressure from environmentalist groups and activist investors.
Axa's announcement over its XL division follows Italian rival Assicurazioni Generali SpA's pledge earlier this month to stop offering insurance coverage to new coal mines and plants.
Other insurance industry players such Scor SE, Swiss Re Ltd. and Zurich Insurance Group Ltd. have also announced certain restrictions on carbon intensive industries.
European insurers have been more proactive than rivals in the United States in terms of their climate change policies.
Reducing insurance coverage of the coal industry raises costs for coal power generation, which could increase pressure on utilities to switch to cleaner energy.
Next month, the United Nations climate change conference takes place in Poland.
XL will also — similar to its parent Axa — stop investing in assets related to coal and tar sands. The company will sell €660 million worth of financial assets starting in 2019, said Mr. Ariss.
XL will also refrain from investing in assets related to the tobacco industry and assets related to chemical and biological weapons, cluster bombs or anti-personnel mines, Mr. Ariss added.