This is the third report released by The Geneva Association Task Force on Climate Change Risk Assessment. Since the 2021 publication of the first two reports, the context in which re/insurers are able to assess the impact of climate change-related risks and opportunities on their business models has further evolved. Developments in climate science, technology, policy, regulation and litigation have hastened the need to not only integrate climate change risk assessment in core business decision-making processes, but also consider physical, transition and litigation risks over different time horizons and their effect across both assets and liabilities.
Our third and final report on climate change risk assessment presents comprehensive yet practical guidance to help re/insurers navigate their companies towards implementing more holistic assessment and forward-looking scenario analysis in their business models, the think tank has said in a press release.
The development of holistic climate change risk assessment requires an exploratory, iterative and adaptive process that takes time. With detailed recommendations for re/insurers, insurance associations and regulatory and standard-setting bodies, this new report delves into the strategies and tactics needed to move forward in an evolving risk landscape.
Highlights include:
- Input from key regulatory and standard-setting bodies across jurisdictions, providing an updated perspective on regulatory priorities and essential questions for re/insurer boards and executive management.
- A strategic framework for re/insurers on how to conduct the analysis, engage experts from relevant business functions, and mine and use consistent data and tools across the company.
- Three examples of business use cases: implications of physical risks on enterprise risk management in P&C; implications of physical and transition risks on investments (P&C and life insurance); and the interactions of physical and transition risks in life & health insurance.
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