2023 was the hottest year on record, as well as the year in which we saw insurance companies abandon their customers most affected by climate risks. Climate change, mainly caused by the burning of fossil fuels (coal, oil and gas), is accompanied by ever more intense and frequent climatic disasters: forest fires, floods, drought, hurricanes, rising sea levels. The damage of these extreme and destructive disasters reached 250 billion dollars in 2023. Yet the proportion of this damage that is not covered by insurance companies is increasing year on year: from 55% in 2022, it has risen to 69% in 2023. Only €30 of every €100 of weather damage is insured.
In 2015, Henri de Castrie, then CEO of AXA, declared that a world 4 degrees warmer would be impossible to insure. As we discover the first difficulties of insuring climate risks in a world already 1.2 degrees warmer, these forecasts seem to underestimate this new reality for the sector. Since January 2024, between 1,000 and 2,000 communes in France, such as Les Sables-d’Olonne, have been deprived of insurance due to climate risks, leaving communities extremely vulnerable and property values in freefall. Insurance companies prefer to pass on the costs of the climate crisis to communities and individuals, rather than make those responsible (fossil fuel companies) pay. On the contrary: instead of mitigating the risks, insurers like AXA are exacerbating the climate crisis by continuing to insure new fossil fuel projects.
Liquefied Natural Gas is a false solution
Recent investigations by Disclose revealed that AXA insures several Liquefied Natural Gas (LNG) terminals in the USA, France and Belgium. Although described as “natural”, LNG is far from being a clean energy source or a transition fuel, but simply a new way of transporting fossil gas, increasing distances and quantities.
In the USA, for example, the French company insures the Tacoma LNG terminal, which started operating in 2021; Freeport LNG, the country’s second largest terminal, whose emissions represent 75 MtCO2/year, a quarter of France’s domestic emissions; and Cameron LNG, one of the largest terminals in the Gulf of Mexico. A destructive business conducted hand in hand with TotalEnergies, the world’s number-two LNG company, which partly owns Cameron LNG. TotalEnergies even intends to increase its LNG production by 50% by 2030.
The environmental impact of LNG is disastrous. Methane leakage throughout its value chain (a gas that has 80 times the global warming effect of CO2), may even make it more polluting than coal, considered the dirtiest fossil fuel. The dangers of LNG are known by the French government as fracking – the method used to extract the gas used for US LNG – is banned in the country.
AXA supports European gas terminals
In addition to locking in our dependence on fossil fuels by enabling the development of terminals with a 15-year lifespan, AXA supports an industry that has dramatic consequences at both global and local levels. In Texas, New Mexico and Louisiana, the extraction and transportation of liquefied gas has led to deteriorating air quality, contaminated water and an increased risk of respiratory diseases, birth defects and cancers in populations that are already victims of systemic oppression, mostly racialized, indigenous and low-income. In June 2022, an explosion and fire at the Freeport LNG terminal forced its closure. Since reopening in March 2023, it continues to pose a risk and has had numerous, ongoing shut-downs due to problems with its pipes, LNG storage tanks and electric motors and other undisclosed safety issues. Residents who live and recreate near the LNG pretreatment and liquefaction plants were shocked by recent optical gas imaging camera readings that showed that massive amounts of methane are constantly emitted from Freeport LNG into communities.
In Europe too, AXA supports LNG import infrastructures, such as Dunkerque LNG in France, the second largest terminal in the European Union. Just a few kilometers from this terminal, which imports billions of m3 of fossil gas a year, thousands of people were hit by repeated historic floods this winter, exacerbated by climate change. The bill for insurers continues to rise: the cost of flooding between November and January this year in the Hauts-de-France region was estimated at 640 million euros.
The science is clear: new oil and gas projects are not compatible with a livable future. On the eve of its annual general meeting, it’s time for AXA to stop being an accomplice of the fossil fuel industry, which is imprisoning us for several decades in a destructive energy model. AXA has shown courage and leadership in the past, inspiring an entire industry to take a stand against the expansion of coal. Now, the company must protect its customers from the worst impacts of climate change and commit to ending its support for LNG terminals.
Originally posted in French by Mediapart.fr by Sacha Ruello-Jossic, a campaigner for the Insure Our Future coalition and Melanie Oldham, Director of Better Brazoria (resident of Freeport, Texas, USA).
