Monday, 05 August 2024.
Last Friday’s post was about climate change pressure on investors. Today we start a short series about the same pressure at the insurance industry.
Climate change is a key source of financial risk, which impacts the resilience of individual insurers and could lead to major financial stability risks.
Insurance supervisors are therefore also preparing themselves in their roles of protecting policyholders and maintaining financial stability of the insurance market.
The International Association of Insurance Supervisors (IAIS) based in Switzerland is a membership organization of insurance supervisors from more than 200 jurisdictions, constituting 97% of the world's insurance premiums. It is the international standards-setting body for the insurance sector.
IAIS is conducting a series of four public consultations on proposed changes to guidance in various Insurance Core Principles (ICPs) and on new supporting material to better incorporate climate risk.
The IAIS conducted the first and second consultations in 2023, a third in March 2024 and a fourth and final consultation started a few weeks ago, on 15 July 2024. Click at the image below to read more about them.
One of the key climate related focus areas for IAIS is to understand the materiality of climate change on future so-called NatCat risks.
NatCat modeling considers hazards, exposure, vulnerability and risk assessment against natural hazards (flood, drought, Tropical Cyclone and seismic) of varying frequency and magnitude on national level.
On 27 August 2024, the IAIS will hold a public background session to update on the draft climate Application Papers which are open for consultation. If you wish to participate in the webinar, click here to register.
Tomorrow we will have another post about the insurance industry and climate change.
