SEC approves shareholder proposal at Travelers regarding climate risk – As You Sow
The recent SEC ruling in favor of a shareholder proposal at Travelers on climate risk marks a significant milestone for investors seeking transparency in the insurance industry’s response to climate change. As You Sow successfully defended its climate-related resolution against a No Action challenge from Travelers. This resolution calls for Travelers to disclose the expected impact of its climate-related pricing and coverage decisions on the sustainability of its homeowners’ insurance business in various climate scenarios.
President of As You Sow, Danielle Fugere, expressed the importance of this win, stating that while Travelers adjusts pricing and coverage in response to growing climate risks, the company has not shown how it plans to maintain a stable and profitable customer base amidst increasing climate-related disasters. The impact of climate change on the insurance industry is becoming more pronounced, with insured losses in the U.S. reaching a record $113 billion in 2024. This has led insurers like Travelers to raise premiums and withdraw coverage in high-risk areas, leaving many homeowners without insurance or unable to afford protection. Nationwide, insurance premiums have surged by 24% between 2017 and 2023, surpassing inflation rates.
As one of the largest home insurers in the U.S., Travelers experienced a significant increase in catastrophe losses from $1.85 billion in 2021 to $2.99 billion in 2023. In response, the company implemented a record renewal premium increase of 19.8% in 2023. As You Sow CEO Andrew Behar emphasized the critical question posed by investors: Can Travelers sustain a viable homeowners’ insurance business as climate impacts accelerate? He stressed the need for transparency in understanding the implications of climate-related pricing and insuring decisions.
The SEC’s decision to reject Travelers’ No Action request, citing concerns of micromanagement, underscores the necessity of addressing climate risk for the long-term business model of insurers. As You Sow pointed out that increasing premiums and cancellations could affect the size of the company’s customer base, making the response to climate-related losses crucial to the company’s value.
This victory builds on As You Sow’s broader engagement with the insurance sector. In addition to Travelers, the organization has filed climate-related resolutions with Allstate, Berkshire Hathaway, and The Hartford, advocating for increased disclosure and accountability regarding underwriting and investment practices that contribute to climate risk. As You Sow remains committed to holding insurance companies accountable to ensure they address the long-term sustainability of their businesses in the face of a rapidly changing climate.
As You Sow, a leading shareholder representative, has been at the forefront of promoting environmental and social corporate responsibility for over 30 years. The organization focuses on various areas, including climate change, ocean plastics, food system toxins, Rights of Nature, racial justice, and workplace diversity. Their shareholder resolution tracker provides insight into their ongoing efforts to promote corporate accountability across sectors.
