Global insurance groups pull out of coal and oil in the face of rising climate hazard costs

One sector of finance acutely sensitive to the rising costs of climate change and the increasing financial hazards it is threatening is the insurance sector. Lloyds of London, perhaps the most well known of insurance underwriters, is pulling out of insuring coal operations; an illustration of global systems being affected by - as well as influencing - carbon-cycle issues.

Lloyds is the latest in a list of global insurance groups that recognises the financial risks it faces as climate hazards intensify in a warming world. Losses from payouts resulting from the flooding of buildings and infrastructure along low-lying coastlines, hurricane damage and the impacts of drought on the agricultural industry are set to be higher than the profits the company makes from insuring coal industry projects. Joining other insurance groups that have ceased insuring oil pipelines, the decision illustrates how fossil fuels are falling out of favour not just as a result of global government actions (such as the COP21 Paris agreement), but also a consequence by global systems of finance seeing the writing on the wall for their future profit and loss scenarios. A nice illustration of the links between carbon cycles and global systems. Read more in this Guardian article.