Munich, Germany-based Allianz Group announced on Friday that it would refuse insurance coverage of coal-fired power plants and coal mines with immediate effect, and would aim to get rid of all coal risks in its business by 2040.

Read more: How can the world move beyond fossil fuels?

In addition, Europe's biggest insurer said it would stop investing in companies that do not cut their greenhouse gas emissions.

"We want to promote the transition to a climate-friendly economy," said chief executive Oliver Bäte, adding that the company wanted to get "even more serious on global warming."

For the time being though, Allianz will continue to insure energy sector companies that produce from "multiple sources," including renewables, but also coal and other fossil fuels. With those clients Allianz wants to "work closely together" to develop low-carbon alternatives.

The new policy comes after Allianz announced in 2015 a shift in its investment policy, divesting all assets in its €664 billion ($794 billion) portfolio which generate more than 30 percent of their revenues from coal. According to company figures, the insurer has since removed stakes worth €225 million under the program.

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Anti-coal movement

Allianz's climate-friendly moves are designed to help prevent global warming from exceeding 2.0 degrees Celsius (3.6 degrees Fahrenheit), as agreed by almost all countries of the world at the 2015 Paris Climate conference.

Read more: US-Poland energy deal bucks anti-coal trend

Since then, a coalition of climate pressure groups, including Greenpeace and Unfriend Coal, has repeatedly called on Allianz to stop insuring coal companies, specifically in Poland where the insurer has strong market share.

And just this week, the City Council of Paris passed a motion, calling on insurance companies to "commit to opposing air pollution and to withdraw their support from projects and companies in the coal sector, notably in the European Union and more particularly in Poland."

Greenpeace Germany energy expert Karsten Smid welcomed Allianz's decision as "important and long-overdue."

"Allianz and other major insurance companies like Munich Re are now called upon to push for a complete phaseout of coal by 2030 to show that they are really serious about the Paris climate accord," he said.

Industry moves

Allianz's European competitors, including Axa and Zurich, have also put climate-saving policies in place, making it harder for coal companies to buy insurance for their operations.

But Allianz claims that it's going one step further by pulling cover from existing coal projects. Its moves were designed to support a "systemic process" to get out of carbon, said CEO Bäte.

Read more: BHP to exit coal alliance over climate change policy

As a result, Allianz would lose €50 million in coal company premiums per year, he added, which however would be offset by more than twice that amount from insuring renewable energy projects. In late 2017, Allianz had around €2.5 billion invested in green energy.

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uhe/tr (Reuters, AFP, dpa)