The insurance industry is defined by assessing risk. More insurance companies should address the biggest one.
Historically, the insurance industry hasn’t given climate change much consideration. As NIA’s CEO, Pamela Davis, recently wrote in an article for Insurance Journal: “Although many of us in the insurance industry have spent our entire careers assessing risks, far too many have missed the biggest risk of all by failing to properly assess the impact of climate change.”
So when an insurance company takes the extraordinary, unusual, and profoundly moral decision to fully divest itself of fossil fuel investments — as Lemonade did in 2018 — that’s to be applauded. Lemonade can and should stand proud for doing the right thing.
We do have one small correction to make. Lemonade has laid claim to being the first insurer to do so.
As far as we know, Nonprofits Insurance Alliance was the first insurer to divest itself of fossil fuel-related investments. Our boards approved this decision in March of 2016, and the actual divestment went into effect in April of 2016.
This 350.org article, written by the same author, makes a more accurate statement: “Before Lemonade, no other US insurance company had publicly forsworn investment in fossil fuels.” We suppose that’s true — from a certain point of view. Back in 2016, NIA didn’t really promote this board decision in the press, online or in our annual report for the year. How else would Lemonade or 350.org know?
Ultimately, the claim of being first doesn’t matter. What matters is doing the right thing now. We hope other insurers follow the example of both NIA and Lemonade and approach climate change as the existential crisis it is.