N°25-58: Insurers' Carbon Underwriting Policies

We study the determinants, structure, implementation, and effects of carbon underwriting policies among the world's largest insurers. Adoption is more common among European insurers and less so among specialty and unlisted firms, with coal policies emerging earlier than those targeting oil and gas. Implementation of coal policies is often incomplete, and some insurers expand coal coverage despite commitments. Using merged mine-insurance policy data, we show that insurers with coal policies reduce the number of insured mines by about 16%, insured coal volumes by 56%, and make continued coverage 13pp less likely. Affected mines reduce output, cut employment, and are abandoned more often in subsequent periods.