Talanx, Hannover Re change underwriting policies for coal-based risks

Germany-based Talanx Group and Hannover Re have tightened their underwriting policies to reduce reinsurance cover for coal-based risks.

The move is part of wider efforts at the company to cut its long term exposure to coal-fired power plants and coal mines. It said that for stand-alone risks, the company will not reinsure any planned new coal-fired power plants or coal mines.

However, in countries where coal accounts for a large proportion of the energy mix and where access to alternative energy sources is insufficient, exceptions would be made. But only after a review of technical standards.

From 2038 onwards, Hannover Re plans to stop reinsuring coal-based power-generation risks in its property and casualty portfolio. It said the longer time frame “makes allowances for the fact that the phase-out of fossil fuels can only take place over the medium to long term”.

The group emphasised its support for the Paris Agreement goals on climate change and reiterated that in Europe 17 of 28 EU member states have decided to phase out fossil fuels or are considering it.

To support the Paris Agreement, the reinsurer no longer invests in issuer securities that generate 25 percent or more of their revenues from coal-based energy production. It also backs a broader transition to renewable or alternative energy by writing more risks for this burgeoning sector.

Talanx also confirmed that it will “continue to progressively expand its investments in renewables and climate-friendly technologies”. It said it has already made direct investments of more than €1.3 billion in renewable energy sources such as wind and solar power.