Insurers' Carbon Underwriting Policies

We study the determinants, design, implementation, and effects of carbon underwriting policies among the world’s largest insurers. Adoption is more common among insurers from countries with stronger climate policies and less so among specialty and unlisted firms, with coal policies preceding oil and gas policies. Linking U.S. coal mines to insurers, we show that implementation of coal policies is often incomplete, and some expand coverage despite commitments. On average, insurers reduce the number of insured mines by 16%, insured coal volumes by 56%, and make continued coverage 13 pp less likely. Affected mines are more likely to be abandoned and constrained.