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Trans Mountain insurer and Lloyd’s of London syndicate Arch Insurance has committed to no longer insure the Trans Mountain tar sands pipeline after its current insurance policy expires this summer. Arch joins seventeen insurance companies, including fellow Lloyd’s syndicate Aspen most recently, that have dropped Trans Mountain or vowed not to insure the Trans Mountain Expansion Project.

Amid pressure from activists to break ties with the tar sands pipeline expansion, in an email to Coal Action Network, a spokesperson for Arch stated: “We can confirm that Arch Capital Group Ltd, on behalf of its underwriting operations, will not issue any future insurance policies covering the Trans Mountain Pipeline.”

"As the 18th insurer to rule out Trans Mountain, Arch is confirming that fossil fuel projects without Free Prior and Informed consent are a material risk, and Trans Mountain's steps to keep their insurers secret will not stop the momentum towards a safer and more just world.” said Charlene Aleck of the Tsleil-Waututh Nation Sacred Trust Initiative. "Trans Mountain is currently looking for more financing to continue construction, but who will fund such a risky project?"

Trans Mountain experienced firsthand the impacts of climate chaos in 2021. Following historic wildfires in the summer, November brought extreme flooding and mudslides that shut down the existing line for three weeks, and resulted in over two months of lower capacity oil flow. Flooding displaced over 14,000 meters of stockpiled pipe meant for the expansion, and the company had to use hundreds of meters of pipeline from the new construction project to repair the old line. More than 18,000 people were displaced from their homes in the climate catastrophe.

According to the last insurance certificate with company names listed, Lloyd's syndicates collectively were the biggest insurer for Trans Mountain. Chubb, and Zurich were the biggest individual insurers listed providing coverage, but since then, both Chubb and Zurich have cut ties, making Lloyd's a remaining top target.

Andrew Taylor from Coal Action Network said: “By refusing to rule out Trans Mountain across its marketplace, Lloyd’s of London is failing its members and the millions of people whose lives are being destroyed by climate change. With Arch and Aspen cutting ties, Beazley and CNA Hardy are the prime targets for public pressure. This could all be avoided if Lloyd’s ended insurance for fossil fuels across its marketplace. It’s 2022. We shouldn’t have to protest on the doorsteps of insurers to avoid climate breakdown. With their understanding of risk, the industry should have taken action decades ago.”

Lloyd’s of London has increasingly been the target of protests in the UK for its connection to the pipeline in the lead up to Lloyd’s of London actual Annual General Meeting on May 19. Resistance has included 60 people from Extinction Rebellion blocking the entrances at their iconic headquarters last month and a climate memorial led by Pacific Islanders and youth strikers from climate change-affected communities.

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“Thanks to the effort of frontline Indigenous communities and grassroots activists, Lloyd’s of London syndicate Arch Insurance joins a growing list of insurance companies committing to no longer providing insurance for the Trans Mountain tar sands pipeline. This is a victory for Indigenous rights, environmental and climate justice. It is time for the Trudeau administration to end the Trans Mountain pipeline,” said Matt Remle (Lakota), co-founder of Mazaska Talks

Insurers covering the project are increasingly backing away from the massive risks of the existing line and the expansion project. The 69-year-old existing pipeline has spilled 85 times in its history. Construction of a major expansion project parallelling the existing line has been delayed in the face of over a decade of powerful Indigenous-led resistance, court cases, corporate campaigning, construction mishaps, and cost overruns.

The projected cost of the Trans Mountain expansion project has quadrupled, according to recent numbers from the Canadian Ministry of Finance. The current price tag is approximately CA$21.4 billion, and the federal government pledged that it would not provide any additional federal funding beyond the $12.6 billion allocated for the pipeline, leaving the budget for completion $8.8 billion CAD short. This decision by the federal government demonstrates the overwhelming opposition and challenges to building oil and gas pipelines.

To date, more than seventeen insurance companies have adopted tar sands exclusion policies, which is having a tangible impact on the price and availability of insurance for the sector.

“The Trans Mountain pipeline network is facing serious risks that financial institutions do not want to support: lack of consent from Indigenous communities, mounting costs, and massive climate, and oil transport impacts.” said Mary Lovell, Insurance Campaigner at Rainforest Action Network. “We call on Beazley, CNA Hardy and all other Lloyd's syndicates to follow suit and drop Trans Mountain, as well as rule out insurance coverage for tar sands sector expansion.”

Companies named on previous insurance certificates that have yet to rule out continued support for the project or the tar sands sector include Energy Insurance Limited, Liberty Mutual, various Lloyd’s of London syndicates, Starr, Stewart Specialty Risk Underwriting, and W.R. Berkley.

"The Trans Mountain pipeline expansion faces severe flooding and river crossing risks. Even before November storms added half a billion dollars to the project cost, Trans Mountain had equipment and generators submerged in the Coquihalla River from flooding. Now the company is recklessly setting the stage for further problems at the Vedder River crossing in Chilliwack where the river overflowed dikes. The company filed a geotechnical report that was withheld during route approval hearings and that only finds this major river crossing feasible as planned based on assumptions that were outdated when the report was written and that remain unmet. As a community member with a long history on this project, I am concerned about the impacts from this pipeline on waterways, and insurers should be too." said Ian Stephen, WaterWealth Project

Additional Background

  • Lloyd’s of London is an insurance marketplace made up of around 80 insurance companies who together insure some of the riskiest and most controversial projects in the world. Lloyd’s syndicates are likely the lead insurers for the existing Trans Mountain pipeline for 2021-22. In December 2020, the Lloyd’s marketplace adopted a weak policy restricting involvement with tar sands projects like Trans Mountain’s pipelines, asking insurance companies that operate within Lloyd’s to not provide new insurance cover for tar sands projects by 2022, but the policy is unclear on how stringent the requirements will be enforced. Furthermore, it allows for continued coverage for the tar sands sector until 2030.
  • If built, the Trans Mountain Expansion Project would transport an additional 590,000 barrels of tar sands oil per day from Alberta to British Columbia, and lead to a 700% increase in oil tankers in the Salish Sea. Many Indigenous communities have consistently and repeatedly rejected the Trans Mountain pipeline and tanker project, but the Canadian government has continued to move forward with construction.
  • In February 2021, the Canadian-owned Trans Mountain corporation petitioned the Canada Energy Regulator to keep the names of its insurance backers secret, a decision that was met with fierce opposition. The Canada Energy Regulator approved the request on April 29, 2021, and Trans Mountain’s most recent insurance certificate was publicly filed with the insurance company names redacted. Last year, a coalition of Indigenous and environmental groups pledged to continue pressuring the remaining companies linked to Trans Mountain until they publicly cut ties.
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