TORONTO (Reuters) – Canada’s largest property and casualty insurers are investing more than C$19.5 billion ($14.3 billion) in fossil fuel production at a time when climate change is putting the insurance industry at increased risk, according to a report by a shareholder advocacy group.
Investors for Paris Climate Action (I4PC) has called on regulators to investigate insurers’ investments in fossil fuels, arguing they lead to higher claims and premiums.
The insurers typically invest premiums on behalf of other clients, funneling money into mining and oil companies such as Canadian miner Teck Resources and Imperial Oil, the report said.
I4PC has previously called on securities regulators to investigate major Canadian banks over alleged misleading climate-related claims and disclosures about investments.
Extreme weather, including wildfires in western Canada and floods on the east coast, caused more than C$3 billion in property damage last year, making it the fourth-highest year in Canadian history for insured losses.
Intact Financial had C$1.48 billion invested in fossil fuels last year, down to C$742 million at the end of the first quarter, according to the I4PC report. Asked about the findings, Intact said energy makes up about 2% of its invested assets and that it has committed to achieving net-zero emissions by 2050.
Desjardins, a Quebec-based credit union and insurance distributor, has a reported C$298 million in fossil fuel investments, with energy-related assets making up 0.6 percent of its loan book, and said it would maintain relationships with companies working to reduce greenhouse gas emissions.
Rival Definity Financial also invests in fossil fuels.
TD Bank, a lending company that also sells insurance, is the largest fossil fuel lender with C$15.47 billion, while Fairfax has invested C$1.53 billion and underwritten C$809 million.
Definiti and Fairfax did not respond to requests for comment.
TD said the report “contrasts the investment profile of TD Bank Group as a whole with that of insurers with more focused mandates, which influences its conclusions.”
Rising risk and inflation are driving up insurance costs: Canadian home and mortgage insurance premiums have risen by more than 73 percent over the past decade, according to I4PC.
I4PC is calling on insurers to develop and disclose transition plans to reduce their exposure to fossil fuels.
(1 dollar = 1.3634 Canadian dollars)
(Reporting by Nivedita Bal in Toronto; Editing by Rod Nickel)
