Korean insurers join the exit in coal business by ceasing coverage

More than half of non-life insurers in South Korea have ended or limited their coverage for coal projects as they become more climate conscious, according to a report on Tuesday.

Korea Beyond Coal, an anti-coal campaign network in South Korea, disclosed an answer from 11 non-life insurers to its question on their insurance policies for coal businesses.

The report found four insurers – DB Insurance, Hyundai Marine & Fire Insurance, Hanwha General Insurance and Hana Insurance – said they have stopped providing coverage for coal-fired power plant constructions and operations.

Samsung Fire & Marine Insurance and Nonghyup Property & Casualty Insurance said they have ended their cover for construction projects of such plants. The remaining five insurers – KB Insurance, Meritz Fire & Marine Insurance, Heungkuk Fire & Marine Insurance, Lotte Non-Life Insurance and MG Non-Life Insurance – did not submit their reply.

More and more global insurers are retreating from coal business amid the growing voice in the international community urging insurers to join the coal phase-out movement.

According to Beyong Coal, Swiss Re, the world’s leading reinsursnce company, divested from companies with an exposure of more than 30 percent to thermal coal business in 2018.

Samcheok Blue Power, the country’s last coal-fired power plant, is struggling to raise finance to resume the suspended construction as it has failed to find investors. It conducted a book-building session last week for debt financing, but no one expressed willingness to buy them.

“Financial industry including investment and insurance markets are clearly distancing from new coal business,” said Lee Jin-seon from Beyond Coal, advising companies to avoid coal projects to properly deal with climate change and financial risks.

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