The supervision of climate-related risks has been the subject of the consultation issued by the International Association of Insurance Supervisors (IAIS) on which Insurance Europe has published its response.
Despite the significant, new challenges created by the COVID-19 pandemic, Insurance Europe believes that the industry can play a key role in the sustainability transition by both investing in sustainable assets and providing insurance coverage to help society to deal with sustainability risks.
While seeking consistency and comparability can be of significant value, care must also be taken to ensure that supervision does not discourage or prevent rapid and innovative developments by insurers to address new risks and changes in the business environment. It is also important to avoid overlaps, duplicative requirements and regulatory overload.
A flexible approach based on strong stakeholder engagement will therefore be vital when developing effective frameworks for supervision. In addition, there is a need for supervisors' active engagement and cooperation with policymakers to develop an environment that helps insurers fully contribute to the transition to a more sustainable economy. Supervisors have a key role in addressing several challenges that cannot be solved by insurers alone.