Life and health insurance companies are in the business of protecting the life and health of Canadians — or at least, that’s the promise. Their profits rely on us enjoying long, healthy lives. For those who can afford the premiums, insurance helps cover care and ease the pressure on our overburdened public healthcare system.
That’s what makes their current investment strategy so hard to stomach.
Canada’s biggest life and health insurers are using the same money we give them to insure our well-being to invest in the greatest threat to human health: climate change. Though some are making moves in a climate-safer direction, data from German think tank Urgewald indicates these companies are some of the largest investors in oil and gas in Canada, backing the fossil fuel industry with over $75 billion in 2024.
As a family doctor and a sustainable finance professional based in Canada, we are increasingly seeing the impact of these investments on our loved ones and the broader community.
From a medical perspective, these impacts are manifesting in increased emergency room visits during heat waves, worsening lung disease from wildfire smoke and fossil fuel air pollution, and rising mental distress. We are not alone in our concern. The Lancet Health Journal has tracked these trends for almost a decade. Now, even the insurance industry’s own think tank, the Geneva Association, is warning about growing impacts of climate change on the life and health insurance industry.
We are bracing for another season of smoke, remembering polluted, gray skies from summer after summer of record-breaking wildfires. Patients with asthma are accustomed to refilling their inhalers while they stock up on sunscreen for warm-weather days. Doctors now routinely counsel patients to stay cool and safe as heat waves approach, recalling the 619 lives lost in the devastating 2021 BC heat dome. Meanwhile, our life and health insurance companies are investing premiums in pushing fossil fuel production to all-time highs.
From a sustainable finance perspective, the contradiction goes deeper. In 2021, many of these companies committed to achieving net-zero financed emissions across their investments, setting these targets because their boards rightly believed it was in their financial interest. In 2022, the Bank of Canada confirmed that portfolios with significant fossil fuel assets risk large losses. This is because fossil fuel companies that don’t transition their business models away from dependence on fossil fuel combustion will not thrive in the clean economy of the future.
In other words, these insurers are risking both their clients’ health and financial stability. However, according to a recent report from Investors for Paris Compliance (I4PC), a climate shareholder advocacy organization one of us leads, these companies are making only limited progress on their net-zero commitments. There’s a lot of talk but little follow-through.
That’s why I4PC has filed a shareholder resolution at Great-West Lifeco, voted upon last month at its annual general meeting. It asked the company to explain how it will meet its net-zero target and what it will do to address the 10 percent of its general account, worth $25 billion, still tied up in fossil fuels. This is the kind of basic accountability Canadian life and health insurance companies need to ensure they protect the communities they serve. I4PC estimates that about 20 per cent of independent shareholders supported the resolution – not bad for a first resolution of its type at the company.
For many Canadians, the idea that their life insurance premiums might be fueling climate change would come as a shock. Our health is being put at risk without our consent. It's time we start following the money and demanding that life and health insurance companies do better.
Dr. Melissa Lem is a family physician and President of the Canadian Association of Physicians for the Environment. Matt Price is the Executive Director of Investors for Paris Compliance.
Comments
Insurance companies want any one single insured to be healthy.
But they want the overall population to be unhealthy, in need of medical care, and thus in need of more medical expenses and insurance.
This was sorted out a dozen years back in the "Obamacare" debates. The insurance companies have no stake in lowering OVERALL medical costs; only from cutting an individual cost. That's why they have whole departments full of people working on not paying out individual claims, but no departments working on lowering overall medical costs.
Sorry, but your whole article is based on a premise that has been proven false.
It seems to me that the point is NOT the nit-picky about insurance companies' creative accounting details, but the fact that they invest in fossil fuel corporations!! This runs parallel to a campaign that I've become involved in. It involves lobbying pension plan management companies to divest their investments in fossil fuel corporations. And this includes our own Canada Pension Plan!!