The largest home insurer in the US, State Farm, which is halting new homeowner policies in California due to the “rapidly growing catastrophe exposure” posed by wildfires, has hired lobbyists who also work to advance fossil fuel industry interests across 18 states, a new database shows.
While State Farm in May refused to take new home insurance applications in California, it retains a lobbying firm in the state – the Sacramento-based KP Public Affairs – which also represents Tenaska, a gas developer. Across the US, State Farm shares lobbyists with a raft of oil and gas companies, including ExxonMobil, Calpine and Occidental Energy.
Allstate, another insurer that followed State Farm in pulling out from new policies in California due to the state’s worsening wildfire risk, has also contracted lobbyists who have fossil fuel clients, such as Chevron, ConocoPhillips and Kinder Morgan.
State Farm and Allstate are just two of more than 150 insurance companies and associations – part of an industry facing steepening losses from fires, floods and other disasters spurred by the climate crisis – that use state-based lobbyists also aligned to fossil fuel interests, according to F Minus, a new database of public disclosure records.
James Browning, executive director of F Minus, said that State Farm’s linkage to fossil fuels stretches to Florida, where its lobbying firm Dean Mead also represents the Williams Companies, a gas pipeline operator in the state. “This allegiance with gas interests clearly pits State Farm against the interests of its customers as they face increasingly severe hurricanes, floods, and soaring insurance costs,” said Browning.
The lobbying overlap between insurers like State Farm and the fossil fuel companies stoking the climate crisis is “problematic and potentially counterproductive”, according to Tom Corringham, a research economist with the Scripps Institution of Oceanography at the University of California, San Diego.
Insurers and fossil fuel companies could be working at cross-purposes around issues such as climate risk disclosures, he said, which the insurance industry requires to accurately price risk for homes facing a rising threat of flooding or fire.
“Fossil fuel lobbyists may advocate for a weakening of disclosure requirements which could ultimately harm insurers and their policyholders,” said Corringham.
“This could have implications for the stability of the insurance sector and the financial industry more broadly. Lobbyists who represent fossil fuel companies may not adequately prioritize these concerns.”
Neither State Farm nor Allstate responded to a request for comment.
The F Minus database revealed how more than 1,500 lobbyists in the US are working on behalf of fossil fuel companies while at the same time representing hundreds of liberal-run cities, universities, technology companies and environmental groups that say they are tackling the climate crisis.
Organizations that did respond to questions from the Guardian defended using fossil fuel-linked lobbyists, among them cities, companies, universities and green groups which said this work didn’t conflict with their own climate goals and in some cases was even beneficial.
The climate crisis is starting to destabilize the insurance industry across the US, with rising global temperatures linked to longer, more ferocious wildfires and more damaging floods and storms. Eight of the 10 costliest wildfires on record have occurred since 2017, while last year saw 18 climate-related disasters that resulted in more than $1bn in damages.
The US Department of the Treasury warned this month that insurers face significant risks from the policies they issue, as well as from potential lawsuits for failure to address exposure to climate calamities. Insurance is regulated at the state level in the US, with some states more inclined than others to focus on climate risks.
In some places, insurers are now cutting their losses. In June, Farmers Insurance announced it will no longer issue new property insurance in Florida, due to “historically high” levels of disaster costs, with AIG earlier in the same month stopping new policies along the state’s hurricane-prone coastline.
This increased wariness of climate impacts hasn’t prevented insurers from using the same lobbyists that fossil fuel firms use, however, despite the clashing priorities of the two industries. The F Minus database, drawn from state disclosure records, shows that dozens of lobbyists are working to further the interests of carbon polluters while also working to aid insurers that are picking up the indirect costs of this pollution.
“The shared representation is puzzling, given that insurers are suffering adverse impacts of climate change caused by the burning of fossil fuels,” said Corringham.
