Insurers taken to task for underwriting gun loopholes
March 7, 2018
By Peter Bosshard, Finance Program Director, The Sunrise Project
In spite of frequent mass shootings and soaring numbers of gun victims, the gun debate in the United States was stuck in the tracks for many years. The courageous, angry and outspoken survivors of the Parkland school massacre in Florida have swept away this blocked debate in only a few weeks. Public opinion is shifting, some politicians have seen themselves forced to change their positions, and gun retailers such as Walmart have adopted policies which Congress refuses to pass.
Insurance companies are critical actors when it comes to the use of guns. They underwrite events like gun shows, which offer a loophole for the sale of firearms without background checks. Some of them are offering insurance for the liability risks of using a gun, a policy officially called Carry Guard but dubbed “murder insurance” by its critics. Other insurers have offered discounts to members of the US gun lobby, the National Rifle Association (NRA).
Guns only make up a tiny part of insurers’ revenues but for gun events, insurance is critical. After a participant shot and injured three spectators, the Cody Gunfighters show in Wyoming was forced to close down in 2016 because no insurer was prepared to underwrite its liability risks anymore.
After operating out of the limelight for many years, gun insurers have now found themselves swept up in the maelstrom of the gun debate in the U.S. Groups like Guns Down America, Color of Change and Drain The NRA are vigorously campaigning for an end of insurance policies that offer special discounts to gun owners, support gun policy loopholes or reduce the liability risks of using a gun. They argue that insurers can no longer deny responsibility for the impacts of what they insure.
Insurers have responded swiftly to the public furor. A week after the Parkland massacre, Chubb informed the public that it had decided to no longer participate in the NRA’s Carry Guard program three months earlier. After some hesitation, Lockton, which had acted as the broker of the program, ended its participation as well. MetLife quickly ended its discount program for NRA members.
On its website the NRA continues to promote a variety of liability policies for gun owners and gun show organizers through Lloyd’s of London. Like in the case of coal projects, Lloyd’s argues that it doesn’t insure the policies directly, but offers a market place for specialty insurers who underwrite the respective risks. A petition calling on Lloyd’s to stop all involvement in gun sales which do not include thorough background checks has already garnered more than 150,000 signatures.
The new anti-gun movement is a rebellion by teenagers and millennials against political and economic elites whose failure to act has betrayed them. The refusal to act on climate change represents a similar betrayal of younger generations by entrenched, self-interested and complacent elites. New climate disasters may unleash the anger of betrayed generations in the same way that the Parkland massacre has done for the gun debate.
The time when insurance companies could hide behind other actors has passed. Supporting the use of guns runs counter to the insurance industry’s avowed mission of keeping people safe and well – and the same is true for climate destroying coal projects. Insurers should get on the right side of history and end their support for gun control loopholes and for coal now.