Trans Mountain Loses Zurich; Beleaguered Pipeline’s Lead Insurer Will Not Renew Policy

Unceded Coast Salish Territories (VANCOUVER, BC) — Yesterday, Reuters reported that Swiss insurance giant Zurich will stop providing coverage for the controversial Trans Mountain pipeline when its policy expires on August 31. Zurich is currently Trans Mountain’s primary excess liability insurer, putting it on the hook for the first $8 million in insurance payouts for the existing pipeline. Trans Mountain is now forced to search for a new primary insurer. 

“The Trans Mountain pipeline puts communities, the climate, and billions of dollars in Canadian taxpayers’ money at risk. Zurich’s decision to walk away from the pipeline just underlines how risky this project has become,” said Sven Biggs, Canadian Oil and Gas Program Director at Stand.earth. “It’s time for the Trudeau government to take another look at this project and ask if this is the right time to spend over $10 billion on a pipeline that is rapidly losing the support of the financial sector.” 

The existing 70-year old Trans Mountain pipeline is a major environmental and public health hazard, with a long history of disastrous spills. The Trans Mountain Expansion Project, which has faced powerful Indigenous-led resistance for years, would multiply these risks. 

“Zurich has done the right thing by refusing to insure the Trans Mountain pipeline any longer. Hopefully Liberty Mutual and the other companies insuring it do the right thing before the end of August and drop it too,” said Grand Chief Stewart Phillip, President, Union of BC Indian Chiefs. “Any company insuring Trans Mountain is complicit in violations of Indigenous Rights, because the proposed pipeline expansion does not have the consent of all impacted First Nations along the route.”

Zurich’s decision comes on the heels of an announcement earlier this month from German insurer Talanx that it will drop the project in light of a recently-adopted policy on oil sands. Both statements also follow pressure from a global coalition of First Nations, climate organizations, and grassroots activists that have been targeting insurers to cut ties with the existing pipeline and the expansion for years. 24,571 people have called on Zurich to drop the project. 

“Since 2014 Tsleil-Waututh Nation has been meeting with Trans Mountain’s shareholders, financiers, ratings agencies and insurers to discuss the multitude of risks facing this project, which have resulted in TWN denying our free, prior, and informed consent,” said Charlene Aleck, Tsleil-Waututh Nation Sacred Trust Initiative. “Zurich is the third insurance company to do the right thing, and we hope that Lloyds, Chubb, Liberty Mutual and the other insurers will follow their lead. Insurers cannot afford to be climate deniers; they are already paying for the devastating impacts of climate change.”

In June 2019, Zurich committed to aligning its business with a 1.5°C pathway and adopted a policy ruling out insurance for oil sands extraction and transportation companies. Despite the policy, Zurich refused to drop Trans Mountain in August 2019, while engaging with the Canadian government to determine if the pipeline fit into Canada’s plans to reduce emissions.  

Following the news that Zurich will no longer back the project, campaigners are turning their focus to the pipeline’s remaining insurers, specifically U.S.-based Liberty Mutual and Chubb, with whom the coalition is currently attempting to engage in dialogue around the pipeline’s risks.

Cherry Tsoi, Senior Campaigner with Leadnow, said: “Zurich dropping this destructive tar sands project means they’ve seen the writing on the wall for projects guilty of climate pollution and the trampling of Indigenous rights — there’s no room for them in our clean energy future. Trans Mountain’s other insurers should take Zurich’s lead and drop the pipeline before the costs of supporting Trans Mountain far outweigh the gains.”

A growing number of investors, insurers, and asset managers are fleeing the oil sands sector, particularly as prices drop in the midst of a global pandemic. Eight global insurers have policies restricting oil sands insurance, and MetLife, one of the largest life insurers in the U.S., recently adopted a policy restricting investments in oil sands companies. 

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Media contacts: 

Ziona Eyob, Canadian Communications Manager, canadamedia@stand.earth, +1 604 757 7279 (PST)
Sven Biggs, Canadian Oil & Gas Campaigns Director, sven@stand.earth, +1 778 882 8354 (PST)