New York, 31 March 2025 – The United Nations Development Programme’s (UNDP) Sustainable Insurance Forum (SIF) released two reports today that provide a comprehensive overview of how insurance supervisors around the world are integrating climate-related risks into supervisory frameworks and regulatory capital requirements.
Drawing from separate surveys conducted in late 2023 and 2024 among 30 and 31 SIF member jurisdictions respectively—representing over 80% of SIF’s global membership—the reports offer in-depth analysis of regulatory approaches and evolving best practices. The findings are further enriched with case studies and insights from members and international supervisory bodies.
The reports confirm a strong recognition among regulators of the financial risks posed by climate change, and are taking steps to address them:
- Most surveyed insurance supervisors already consider climate-related risks in their supervisory activities.
- A majority of insurance supervisors have incorporated climate risks into regulatory capital frameworks—although implementation challenges and gaps remain.
Key insights include:
- A majority of respondents reported that insurers have incorporated climate scenario analysis or climate stress testing into their Own Risk and Solvency Assessments (ORSAs) or equivalent regulatory processes.
- Physical and transition risks dominate insurers’ climate risk assessments, while litigation risk was to date less frequently considered.
- Regulators face common challenges in adapting capital add-on frameworks to explicitly account for climate-related risks, including limited historical climate risk data, internal technical capacity, and the lack of established global methodologies.
Looking ahead, the reports call for coordinated global efforts to:
- Expand the availability and quality of climate risk data,
- Build supervisory expertise and institutional capacity,
- Enhance the use of climate scenarios and stress-testing tools, and
- Consider prudent, evidence-based adjustments to regulatory capital frameworks.
Marcos Neto, UN Assistant Secretary-General and Director of UNDP’s Bureau for Policy and Programme Support stated, “These reports are a timely call for global collaboration. They chart a path toward cohesive, forward-looking regulation that equips insurers and supervisors to confront climate risks and collectively shape a more sustainable financial future.”
Daniel Wang, Chair of the Sustainable Insurance Forum and Executive Director at the Monetary Authority of Singapore, added: “As climate risks impact the financial system, these reports offer regulators guidance to build a more stable, resilient, and sustainable insurance sector. By showcasing innovative approaches and practical case studies, they are useful references for embedding sustainability into insurance supervision and capital requirements.”
