Dear Mr Baumgartl, Mr Haas,
Dear Members of Talanx Board of Management and Supervisory Board,
My name is Jan Chudzyński, from “Development YES – Open-pit mines NO” Foundation from Poland. I came here to draw your attention to the insurance and re-insurance activity of Talanx’s subsidiaries. These are Hannover Rueck and Talanx’s Polish subsidiary, Warta. They carry on insuring and reinsuring Polish coal companies, which leads to perpetuating a status quo that is known as “Polish coal addiction”.
This addiction makes Polish coal sector the most pollutant in Europe, causing an estimated 5,800 premature deaths in Europe every year, including 600 in Germany. What is more, over 30 Polish cities are on the list of 50 most polluted cities in European Union.
Polish civil society finally woke up and is now pushing for an energy transformation and a coal phase-out. However, Polish utilities still have aggressive coal expansion plans that would lead to a carbon lock-in and a dire future. What is striking is that among European utilities, there were only Polish and Greek coal sectors that didn’t agree to end investing in new coal capacity after 2020.
Nevertheless, it is not only a public health issue – Polish coal sector poses a serious threat to reaching emission reduction targets set by the Paris Agreement. This should be of the Board’s concern, as 2017 was a historic year for billion–dollar weather and climate disasters. Failing to act now means more human tragedies and material risk in the future, a fact that insurance industry is well aware of. Indeed, many international bodies warn us against it and insurance companies’ responsibility in this respect is recognized.
More and more top insurers move away from insuring coal industry. AXA, Zurich, SCOR and, as it was announced last Friday, Allianz, adopt policies that set an example for other companies. I hope that this message gets through to Talanx, whose subsidiaries offer insurance and reinsurance for the aggressively expanding Polish coal sector.
Talanx’s Polish subsidiary, Warta, is a major insurer on Polish market, being one of the most active insurers of coal utilities. It insures Kozienice power plant – the largest hard coal-fired power plant in the EU. Warta was also the insurer of an expansion of this plant, completed just recently. The owner of this plant, Polish utility Enea, is planning to expand its coal capacity by developing a new 1000 MWe power plant called Ostrołęka C.
Unfortunately, the case of Opole power plant, the biggest coal power plant currently under construction in Europe, is quite similar. Warta is the insurer of both the power plant itself and the ongoing expansion process. Moreover, this plant’s owner, PGE, is planning to develop a new open-pit mine that will hold approx. 600 million tonnes of lignite, the dirtiest fossil fuel.
Warta also insures lignite complex ZE PAK which comprises open-pit mines and lignite power plants. As much as 95% of power generated by ZE PAK is fueled by lignite and company has plans for three new open-pit mines that would hold approx. 1 billion tonnes of lignite. This lignite-addiction and serious expansion plans make ZE PAK a company that is far beyond any reasonable criteria for insuring it. Thus, I was surprised to have learnt that Warta had nevertheless renewed the insurance contract with ZE PAK through to 2019.
On the top of that, Hannover RE, of whose principal shareholder is Talanx, provides
reinsurance to the leading coal sector underwriter in Poland. This is state-controlled PZU, which is very much engaged in insuring coal sector and last year signed a letter of intent to insure the construction of the already mentioned 1000 MWe Ostrołęka C power plant.
As you can see, Talanx’s engagement in insuring and reinsuring Polish coal infrastructure is strong. Many of the companies in Talanx’s insurance portfolio do not even have any intention to phase-out coal in the future. Quite the opposite – they have expansion plans. And this, in context of the perils of climate change, is irresponsible.
Baring in mind the environmental, financial and reputational risk that insuring Polish coal poses to the company, I would like to ask you the following questions:
- Is Talanx considering any company-wide policy that would exclude companies with high coal-dependence from insurance, similar to what was announced by AXA and, most recently, by Allianz?
- Is Talanx going to renew the ongoing insurance contracts with the companies that have plans for extending of their coal capacity? E.g. ZE PAK?
- Is Talanx going to apply any coal-exclusion strategy to its reinsurance operations as was done by SCOR?
I apreciate your attention and thank you for letting me speak here.