Insurers cutting back on cover to the coal sector are likely to benefit from an ”enhanced public reputation” and reduced exposure to future liability risks, data and analytics company GlobalData says.

“On the surface, distancing itself from coal may have a significantly negative impact on the insurance industry, given the loss of business,” Insurance Analyst Daniel Pearce said.

“However, in addition to the possible progress in consumer perception, the industry may in fact enjoy a considerable financial benefit in the longer term as a result of any anti-coal stance.”

Climate change is forecast to cause increased frequency of extreme weather events and rising sea levels, potential increasing claims costs for the insurance industry.

Axa’s recently acquired XL division has announced it will no longer insure construction projects related to coal-fired power plants and the extraction of tar sands, with the move expected to drive a €100 million ($164.9 million) loss in revenue.

Other European insurers are making similar decisions but according to ratings company Moody’s there has been no meaningful loss of business for the handful of providers that have taken such action, London-based GlobalData says.

Chubb says by 2022 it will no longer provide insurance or investments to companies operating coal-fired plants, or to firms for which coal mining generates more than 30% of revenue.

Australian insurers are also acting, with QBE phasing out underwriting for thermal coal customers, except statutory or compulsory insurance, by 2030.

IAG is committed to ceasing underwriting entities that extract fossil fuels or use them for power generation by 2023. Suncorp has a policy of not investing in, or underwriting, new coal-related businesses and will phase out the exposures by 2025.