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Axis to shun oil and gas underwriting at Arctic National Wildlife Refuge

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Axis has said it will not insure oil and gas projects in the Arctic National Wildlife Refuge, becoming the latest company in the insurance sector to take a firmer stand on climate change.

In a letter to the Gwich’in Steering Committee, a group that represents native Alaskans, Axis general counsel Conrad Brooks said the company would not offer new insurance or facultative reinsurance contracts covering the exploration, production, or transportation of oil and gas at the refuge.

The move makes Axis the first North American carrier to take the step, following earlier promises by Axa and Swiss Re.

“We believe climate-related risks are among the most serious issues facing the world today. We also recognize the importance of the Arctic National Wildlife Refuge to the [Gwich’in] and your families, as well as our planet,” Brooks told the committee in his letter.

Conrad said Axis would update underwriting policies in 2021 “to reinforce [its] commitment and consider a range of factors including wider Arctic”.

In 2019, Axis said it would discontinue underwriting new thermal coal plants and mines, along with dedicated infrastructure, as well as for oil sands extraction and pipeline projects beginning last year. It also promised to stop providing cover for businesses that derived 30% of their revenue from those services.

At the time, the company said renewals would be reevaluated on a case-by-case basis beginning in 2023.

The Gwich’in Steering Committee cheered the Axis decision in a statement:

“Axis Capital’s announcement is yet another sign that insurers and investors still consider oil and gas development in the Arctic Refuge too great a financial and reputational risk, which may make it difficult for any leaseholders to find development partners,” the group said.

The committee was among several groups who previously criticized environmental initiatives announced by Lloyd’s in December as falling short.

Earlier this month, the Trump administration auctioned off drilling rights to the refuge, a sale that attracted limited interest from major oil companies after banks said they would not finance Arctic energy projects.

The auction came after Republican-led legislation in 2017 opened the region to oil development, requiring two lease sales within a seven-year period, and requiring the first to be completed before the end of 2021.

Axis’ move is the latest action taken by a company within the insurance sector that makes climate change policy a greater priority.

Last week, global broker Marsh & McLennan Companies said it would become carbon neutral in 2021 and reduce its emissions by 15% of 2019 levels by 2025, while RenRe set a target to become carbon negative.

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