Insurance companies are shaping as the next battlefront in the local fossil fuels divestment fight.
Australia's big four banks were the main targets last year, but activist groups say insurance companies are as important as banks in divestment, and fossil fuel companies cannot operate without them.
Julien Vincent, lead campaigner at Market Forces, clsaid the country's major insurers, and regulator APRA, have "their heads in the sand on climate change".
Divestment campaigners will try to put pressure on the insurance sector "by forcing the industry to have an honest, public conversation about the realities of climate change hurting their sector".
The top three Australian insurers – QBE, Suncorp and IAG – manage about $76 billion.
"The first step is to show how entwined in the fossil fuel industry, and its fortunes, insurance is, from insuring physical assets and infrastructure as QBE does with coal mines, to holding equity in fossil fuel companies, to investing in projects and companies through asset management."
In addition, insurance companies were on the "front line" of the impacts of climate change, Mr Vincent said.
"Losing hundreds of millions of dollars on extreme weather events and putting it down to bad luck, while glossing over or ignoring climate change in their shareholder communications, is a massive disservice to the people who share in the risk of lost company value. It is similarly useless to policyholders who face increased premiums."
The opening battle of the campaign will be to try to get Australia's listed major insurers to link climate change to profitability, such as by specifying the amount they have lost on extreme weather payouts in recent years. Activists all want insurers to address climate and carbon in their annual reports more comprehensively, or even at all, in some instances.
Stop underwriting projects
But the ultimate aim is to pressure insurers to stop underwriting insurance fossil fuel projects and investing in fossil fuel companies, and start investing in renewable energy and energy efficiency.
The approach will be different from that to the banks, where the activists began by revealing which banks were most actively financing fossil fuels. That information is not available on insurers so they are instead starting at the other end – impacts and their risks to the industry.
Of the three big listed insurers in Australia, QBE is the only one known to underwrite fossil fuel projects, but the size of its exposure is not clear.
While QBE, Suncorp and IAG participate in the Carbon Disclosure Project, none disclose so-called "Scope 3" emissions, which would include the projects they underwrite and their investment portfolios.
A spokesperson for IAG said it works on "prevention, rather than cure" to improve Australia's resilience to climate change.
"We work tirelessly to mitigate the risks that climate change may have to our business, communities and economy," the spokesperson said, and IAG is carbon neutral.
A Suncorp spokesperson on Monday did not speak directly to climate change, but said: "Suncorp recognises that an increase in the frequency and severity of natural hazard events impacts the community and our business, and we adjust our provisions for such events annually."
Suncorp said it is "publicly advocating for greater investment in natural disaster mitigation". It had only a small exposure to equity investments in fossil fuel companies, and they were managed externally, Suncorp said.
QBE, the Insurance Council of Australia, and regulator APRA declined to comment.
Divesting coal from portfolios
Late last year, ahead of the COP21 talks in Paris, the world's biggest insurer, Allianz, said it was divesting coal from its portfolios – but what that meant in dollar terms is not clear.
And last week, the California Insurance Commissioner called for the insurance industry to voluntarily divest from thermal coal.
London's insurance industry is far more advanced than Australia's on acknowledging climate change.
Last year 15 insurance CEOs in the UK demanded urgent action on climate change. They made their commitments shortly after Bank of England governor Mark Carney said climate change could pose a significant long-term financial risk to insurance companies.
But at the time, the Insurance Council of Australia said that while it broadly agreed with Dr Carney's comments, they were "more relevant for the northern hemisphere life and general insurance industries".
Separately, campaigners in Australia are also eying the reinsurance industry.
"Reinsurance is literally where the buck stops," Mr Vincent said. "The reason Suncorp, IAG or QBE makes losses on extreme weather is because of how much they're able to provision out to reinsurance and how much risk they're left bearing themselves."
"When it comes to environmental, social and governance risks reinsurers are typically well ahead of everyone else."
He said global reinsurers like MunichRe and SwissRe, or QBE's EquatorRe "make a huge effort" to analyse those risks for projects, companies and sectors.