Meeting reveals Neal’s failure to understand the need to stop insuring fossil fuel expansion

On February 16, Insure Our Future network members challenged John Neal, CEO of Lloyd’s of London, on the insurer’s fossil fuel policies and actions in a long awaited, but ultimately very disappointing, on-the-record meeting at Lloyd’s Lime Street headquarters.

The meeting between Neal, Lindsay Keenan, European Coordinator of Insure Our Future, and Mia Watanabe, UK Campaigner at Market Forces, revealed major problems with how Lloyd’s, and in particular its CEO, is addressing the climate crisis. The meeting started with Neal accepting a letter with 137,400 signatures on behalf of SumOfUs, an Insure Our Future network member. The letter demanded Lloyd’s stop supporting new and expansionary coal, oil and gas projects, including the East African Crude Oil Pipeline, Trans Mountain pipeline, Adani Carmichael coal mine, and oil drilling by the Bahamas Petroleum Company.

In stark contrast to statements made by Lloyd’s Council Chairman, Bruce Carnegie Brown, and what is clearly written in Lloyd’s December 2020 ESG report, Neal stated that in his view Lloyd’s ESG policy was nothing more than a “‘provocative discussion document”.

Revealingly, Neal claimed that, following the publication of the report, he had been contacted and lobbied by regulators, corporations, and state and national officials from around the world who said they were against the ESG policy and concerned about its ambitions. He confirmed that Lloyd’s had subsequently informed its members the ESG commitments were non-mandatory guidelines.

Despite lending a sympathetic ear to industry stakeholders, Neal was unequivocal in stating that he did not see it as his role to meet with representatives of communities impacted by the fossil fuel projects that Lloyd’s insures or invests in.

While professing to respect climate science and the International Energy Agency’s (IEA) 2021 report, Neal appeared to not understand nor accept the report’s key finding that there are no new coal mines or oil and gas fields approved for development in a Net Zero by 2050 pathway. Under Neal, Lloyd’s has no plan to align its policies with the IEA findings.

“It is a serious problem that John Neal has not been well enough briefed, or is just personally sceptical, about climate science and the findings of the International Energy Agency. An ESG policy touted by Carnegie-Brown as a ‘plan for becoming a truly sustainable insurance market’ has, under John Neal, become nothing more than a ‘discussion document’ that syndicates can take or leave as they see fit. It is abundantly clear that John Neal prioritises profits at the cost of people and planet, and that under his leadership Lloyd’s policies fail to match its climate rhetoric,” said Lindsay Keenan, European Coordinator of Insure Our Future.

Neal further exposed his disregard for climate action by failing to make a clear commitment that Lloyd’s members would not insure the East African Crude Oil Pipeline and saying Lloyd’s has no current plans to adopt an exclusion policy for oil and gas expansion.

On the Adani Carmichael coal project in Australia, a source of significant controversy for Lloyd’s over the last two years, Neal said that “to the best of my knowledge” the project is no longer insured in the Lloyd’s market. While Neal encouraged syndicates not to underwrite Adani, he refused to give a clear commitment on its status inside Lloyd’s, both now and in the future.

“The #StopAdani campaign has done the work John Neal should have done, and convinced the vast majority of its insurers to commit to never insuring the disastrous Adani Carmichael thermal coal project. Now, Neal needs to come clean and officially clarify if the Lloyd’s market remains exposed to Adani, and make the promise to not insure the climate-wrecking project in the future. If Lloyd’s cannot take this basic step, then its ESG policies have failed their most simple test and Adani Carmichael will continue to be a stain on its reputation,” said Mia Watanabe, UK Campaigner at Market Forces

Lloyd’s stated commitment to transparency is contradicted by its actions. Neal said Lloyd’s expects its members to have robust net-zero ESG plans, but will not ask them to publish those policies. He confirmed that data on insured emissions will be collected at syndicate level, but published only as obscure market wide data. Neal tried to justify the lack of transparency by saying he didn’t want to put additional pressure on Lloyd’s members.

Neal stated many times in the meeting that UK competition law prevents him from mandating marketwide action. Previously, Lloyd’s excuse was that it didn’t have the power to require the implementation of its ESG policy, which was proved false by its own bylaws. Neal now points to competition law as the barrier preventing Lloyd’s from mandating its members stop insuring and investing in specific fossil fuel sectors.

Keenan added, “Neal has no intention of taking marketwide action and is using competition law as his latest excuse. However, it does raise a significant question that must be asked of the UK Competition and Markets Authority regarding whether there is any legal barrier to coordinated industry action to meet climate targets.”

The meeting concluded with Keenan’s challenge for Neal to invite Insure our Future members, climate scientists and impacted communities to meet with Lloyd’s Council and ESG committee, and for Neal to join him in a public debate to clarify and discuss Lloyd’s policies. Neal said he would consider each of these, and appeared to mean it.

Purpose of the action:

This action has two purposes. Firstly, it's about reaching people we wouldn't normally, informing them about the role insurers are playing in the climate-destroying Adani coal mine. Secondly, it's about delivering a blow to the public image of these companies by bringing their star ratings crashing down.

How to add a Google review:

In order to review somewhere on Google, you will need a Google account. It’s free and easy; Google has a support page on how to do so here, but get in touch if you’d like some extra help. 

• Make sure you’re signed into your Google account before you leave your review.
• Following one of the links on our location list at the bottom of this page will take you directly to one of the offices we’re targeting. There will be a panel on the left hand side that tells you information about the building, such as its opening hours, contact info, and photos. If you scroll down this, you will find the review summary.

• From here, you simply click ‘Write a review’ and get going!
• You can add a star rating to the location, as well as a text review. If you want, you can also add an image to your review to help it stand out. 
• Tell each of these companies how you feel about them continuing to insure the climate-destroying Adani coal project. Members of the public can see this, so this is a great opportunity to spread the word, educate, and inform other people.  
• Keep it personal - what are your thoughts and opinions, why do you think these companies should rule out underwriting the Adani coal mine. 
• Remember, you can only review each location on Google once!

How to add a Google review:

Once you’ve finished your Google reviews, amplify them by sharing them - with friends, family, us, or on social media. 

• You can share your own review, and like and share other people’s reviews using these buttons at the bottom of reviews. The more people who like and share these reviews, the more people will see them.

• If you share a review on Twitter, add the hashtags #StopAdani #InsureOurFuture, and tag the company the review is of (e.g. @HamiltonInsures @LloydsofLondon, @ConvexIn).

What is the Lloyd’s of London?

Firstly, it’s nothing at all to do with Lloyd’s PLC, the bank – they’re not great either, but that’s another story.

Lloyd’s of London is a large insurance corporation with an HQ in London but trade insurance globally. In its own words, Lloyd’s of London “oversees and supports the Lloyd’s market, ensuring it operates efficiently and retains its reputation as the market of choice for specialist insurance and reinsurance risk.” You can watch Lloyd’s of London’s very corporate video explaining what they do.

What is “Lloyd’s marketplace”?

Insurance companies use Lloyd’s of London’s marketplace much like sellers use eBay’s website. Just as eBay supports bidding between buyers and sellers, so does Lloyd’s of London, employing over 200 brokers to match insurance customers with insurance companies. And just like eBay, Lloyd’s of London offers some form of guarantee for insurance bought via their marketplace, encouraging trades through to be made through it.

What is Lloyd’s of London's connection to Adani and West Cumbria coal mines, and fossil fuels

Lloyd’s of London marketplace is in the top 4 for insuring climate-wrecking fossil fuel projects around the world. Lloyd’s of London’s marketplace is particularly attractive to large fossil fuel projects as Lloyd’s has a reputation for getting high-risk projects insured that other insurance companies won’t touch. One way it does this is by splitting an insurance policy, and spreading the risk, between insurance companies using their marketplace. This amounts to an insurance for climate chaos as it’s only with insurance that companies can take the financial risks to dig new coal mines, build new tar sand pipelines, and explore new gas and oil fields.

Lloyd’s of London has refused to rule out allowing Adani’s Carmichael coal mine in Australia or the West Cumbria coal mine in the UK to obtain insurance via their marketplace. If Adani’s Carmichael coal mine gets insurance and goes ahead, it would open up one of the world’s biggest coal deposits contributing to a climate catastrophe.

What is Lloyd’s of London doing to prevent their contribution to climate change?

Not much, and definitely not enough.

Lloyd’s of London have only committed to a policy of greenwash that is incompatible with our climate crisis, continuing to insure risky projects that no one else will touch. So far Lloyd’s of London has committed to asking insurers operating in their marketplace to stop insuring tar sands, thermal coal mines, and Arctic exploration, phasing this out by 2022. But ‘reinsurance’ for these worst offenders is allowed up until 2030.

This also leaves a huge range of climate-wrecking projects free to continue insuring their risk via Lloyd’s of London marketplace with no policy at all to discourage it. In practice, this means the planned West Cumbria mine could be insured via Lloyd’s of London marketplace as it intends to mine ‘coking coal’, not ‘thermal coal’, although both are eventually burned, producing similar emissions.

What more could Lloyd’s of London marketplace do to prevent their contribution to climate change?

Lloyd’s of London could most simply ban all fossil fuel insurance trading via their marketplace. Their own statement clearly indicates this would be possible; “Lloyd’s publishes minimum standards and monitors compliance with those minimum standards. Lloyd’s by-laws also set out a number of rules with which market participants are required to comply”.

Fossil fuel projects only amount to around 5% of Lloyd’s of London’s marketplace insurance trades, so the company would still have a future without selling out ours.

What would be the impact if Lloyd’s of London ruled out fossil fuel insurance?

Some of the fossil fuel projects would source insurance from other providers and marketplaces, but many using Lloyd’s of London marketplace have failed to secure insurance elsewhere—Lloyd’s of London is sometimes their last chance. Let’s not give it to them.

Insurance providers also look to one another in setting their policies, so if Lloyd’s of London drops fossil fuel insurance, it is likely other insurance traders and providers will too—with a bit of encouragement.

Insurance might not be the sexiest subject, but it is a very vulnerable link in the chain needed to start and continue these huge climate-wrecking projects. It’s time Lloyd’s of London take responsibility for the role its insurance marketplace has in our collective future.

What is an insurance policy?

A contract that a company or individual takes out with an insurer to protect them against specific risks in ways that are agreed and noted in the contract.

What is ‘claims made’ insurance?

Type of insurance policy that will cover insurance claims made whilst the insurance policy is in force – even if the event leading to that insurance claim happened before that insurance policy came into force.

What is ‘claims occurring’ insurance?

Type of insurance policy that will cover insurance claims for events that occurred whilst the insurance policy is in force – even if the claim for it happens after the insurance policy stopped being in force.

No related insurance:

They don't insure coal mines e.g. they just cover travel insurance.

What is ‘run-off’ insurance:

AKA: Not 'live' insurance. Type of insurance policy that comes into effect when a company stops trading. So, any claims made under it will relate to events that happened before the company stopped trading and the policy started. This is used by companies that had ‘claims made’ insurance, and want insurance in case anyone takes action against them after the company for the period of time after they stopped trading but are still liable.