Changes in underwriting appetite for thermal coal

01 March 2018

Thermal coal risks, both in project and operational phases, form a significant share of the mining and power generation programmes underwritten in the international insurance market. However, underwriter support for such risks is under review in many areas which may lead to placement challenges in the future.

The first signs of changing insurer sentiment to the underwriting of thermal coal risks emerged in November 2017 when Zurich announced a move away from the occupancy. Soon after this it became apparent that Swiss Re and Scor were taking a similar stance and in the intervening months it has become a topic being carefully watched by insurers, clients and their brokers.

These changes are aimed at the thermal coal sector rather than the metallurgical (steel making) coal sector and we are closely monitoring the impact on available construction, liability and property damage and business interruption insurance capacity for both thermal coal miners and electricity producers accordingly.


Changes to many insurers’ investment holdings in thermal coal producing or using businesses have been made since the Paris climate change accord of April 2016, yet it was in November 2017 that potential changes to underwriting appetite became apparent.

This has been publicised and encouraged by the campaign group Unfriend Coal, who published An Insurance Scorecard on Coal and Climate Change in November 2017 to highlight how insurance is an essential source of risk finance for major projects and to show which insurers have changed their stance on thermal coal investments and underwriting.

This matter received further attention when the subject was commented on by the Financial Times in an article by Oliver Ralph on 8 January 2018.


Since 2015, 15 insurers have collectively divested in the region of USD 20 billion of coal related assets from their investment portfolios, AXA was reported as the first insurer to reduce investment in thermal coal, in 2015 and Lloyd’s of London have been the latest to make an announcement in November 2017.

Furthermore, Zurich, Swiss Re and Scor have stated or indicated a changing underwriting appetite for thermal coal risks. The exact parameters of each insurer’s revised thermal coal appetite varies but Zurich, Scor and Swiss Re are (or soon will be) limiting capacity for risks where more than 30% of revenue or production is generated by thermal coal.

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For further information please contact Harry Floyd, Partner on +44 (0)207 466 1305 or email


contact Harry Floyd
Partner, JLT Mining