Travelers, Chubb face shareholder calls to disclose climate and emissions data

By Rebecca Delaney

April 4 - (The Insurer) - Travelers and Chubb will both face climate-related shareholder resolutions at their upcoming annual general meetings after the SEC rejected separate bids to strike down the proposals as "micromanagement".

Shareholder representative As You Sow filed a resolution requesting that Travelers disclose the expected impact of its climate-related pricing and coverage decisions on the future profitability and sustainability of its homeowners insurance business under various climate scenarios.

This includes the projected percentage of policies insurable owing to climate risk and projected climate-related policy non-renewals and rate increases, as well as the related impact to profitability and any investment risk from associated municipal bond and housing market bubbles.

"As Travelers’ cancellations grow and climate-related rate increases outprice its customer base, it is unclear how Travelers will successfully maintain its homeowner business line, which makes up 50% of its personal insurance business," said As You Sow's resolution.

"In Travelers’ TCFD climate risk discussion, Travelers notes it can reduce growing climate risk by annually adjusting its pricing and policy conditions – that is, by raising rates and reducing coverage. However, Travelers fails to explain if or how it can retain sufficient homeowners policies to remain profitable as it makes these adjustments."

Travelers' no action request was dismissed by the SEC's Rule 14a-8 shareholder proposals review team last week on the basis that "the proposal does not seek to micromanage the company".

A similar ruling was also given to Chubb last week in relation to a shareholder proposal for the 2025 proxy ballot from Green Century Capital Management.

The Boston-based family of “fossil fuel-free, responsible, and diversified” U.S. mutual funds argued that Chubb does not disclose emissions from its investments or insurance activities.

"Thus, shareholders are left uncertain about Chubb’s exposure to climate risks and the actions, if any, it is taking to reduce such risks," said Green Century.

The proposal therefore seeks to require the Evan Greenberg-led carrier to issue a report disclosing the greenhouse gas emissions from its underwriting and investment activities.

Chubb's no action request argued that there is currently no "scientifically sound" methodology to calculate emissions from insurance and investment activities owing to the complexity of the portfolios. It added that even the ability to produce a scientifically sound estimate of insurance-associated emissions would not provide a basis to actuarially assess Chubb's exposure to climate risks.

The SEC review team decided that Chubb was unable to exclude the proposal as, "in our view, the proposal does not seek to micromanage the company".

Chubb's argument to exclude the proposal on the basis that it has already been "substantially implemented" through regular public disclosures on climate-related strategy and exposure was also rejected.

Last year, Green Century submitted a proposal to Markel's AGM ballot calling for disclosure of information on greenhouse gas emissions associated with its underwriting and investment activities.