China’s Export Insurance Giant is Taking a Risk on Coal

A growing number of insurers are catching on to the danger of coal. In 2015, French insurer Axa became the first global company to divest from coal, following up with further restrictions on coal financing in 2018. Nineteen other global insurance firms have since followed suit.

Japan’s Nippon Life Insurance announced in July 2018 that it would stop underwriting new coal-fired power projects both at home and overseas. By the end of 2018, three Japanese insurers had divested from coal power.

Because Sinosure is state-owned, its portfolio reflects government strategy rather than solely market forces, and in the short term, it may be able to absorb more risk. But with 28 gigawatts of coal capacity around the world, the potential for Sinosure to see serious losses from coal remains alarmingly high.

China’s Export Insurance Giant is Taking a Risk on Coal