Arctic drilling exclusion
An insurer's or reinsurer's commitment to no longer cover new oil and gas exploration or drilling projects in the Arctic region.
AIG, Chubb, early 2020s: a string of major international insurers and reinsurers announce they will no longer write new oil and gas exploration or drilling projects in the Arctic, whether property, liability or construction all risks. The Arctic exclusion, taken on voluntarily, differs from coal policies in being geographic rather than sectoral. It targets an environment seen as fragile and symbolically loaded, where a drilling accident would be harder to contain in extreme conditions and costlier in reputation for the carrier on risk. Most wordings exclude new projects only. Existing installations already on the books stay covered for a while, which protects near-term premium while shutting the door on future growth in the class. Then there is the map: the definition of the zone varies from one policy to the next, and that is often where the real reach of the commitment is decided. For an operator targeting the region the effect compounds, and a project can run short of capacity to complete its program before price even comes up.
In the early 2020s, several major US insurers announced they would no longer cover oil and gas exploration in the Arctic National Wildlife Refuge in Alaska; others, in Europe, exclude the whole Arctic region, on maps that do not overlap.
Arctic exclusion, Arctic drilling exclusion
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