SIF Implementation of TCFD Recommendations by Insurance Supervisors and Regulators

The UNDP Sustainable Insurance Forum (SIF) has published a paper outlining supervisory and regulatory practices in implementing the Taskforce for Climate-related Financial Disclosures (TCFD) recommendations. This paper builds upon the SIF’s recognition of the TCFD recommendations as the preeminent disclosure framework for climate-related risks.

The paper highlights the improvements in the quantity, quality and comparability of climate-related disclosures observed through the implementation of the TCFD recommendations.

The SIF paper condenses the learnings from the current practices of SIF members in implementing the TCFD recommendations in their own jurisdictions, including using the information available in supervisory activities. Case studies from SIF members provide more detailed insights into the ways in which supervisors and regulators are encouraging voluntary TCFD-aligned disclosures and mandating requirements for such disclosures.

SIF Scoping Study: Nature-related Risks in the Global Insurance Sector

The UNDP Sustainable Insurance Forum (SIF) has published the ‘SIF Scoping Study: Nature-related Risks in the Global Insurance Sector’. This study marks a pioneering effort to explore and understand the global insurance sector’s dependence on nature, what nature-related risks could be, and whether and how nature-related risks are financially material to the sector’s underwriting and investing business.  

The SIF members and partners; experts and industry participants have contributed to this scoping study. The study has employed a mixed research methodology and a survey of 108 insurance sector participants from 32 countries, 57 percent of whom were insurers and reinsurers, 10 percent insurance industry associations and 5 percent insurance brokers. It seeks to gauge the financial risks of nature-related loss and assess how insurance supervisors and insurance companies are responding to these risks.

Funded by the Executive Office of the Secretary-General of the United Nations and Sustainable Finance Ireland, this report has been commissioned by the SIF Secretariat, and authored by Prajwal Baral.



SIF/IAIS Application Paper on the Supervision of Climate-Related Risks in the Insurance Sector

The United Nations-convened Sustainable Insurance Forum (SIF) in partnership with the International Association of Insurance Supervisors (IAIS), has published the Application Paper on the Supervision of Climate-related Risks in the Insurance Sector. The Paper provides insurance supervisors with concrete tools to further strengthen their efforts in assessing and addressing risks from climate change. It also sets out recommendations and examples of good practice consistent with the IAIS Insurance Core Principles (ICPs).

The following topics are in scope of the Paper:

  • Supervisory Review and Reporting
  • Corporate Governance
  • Risk Management, including scenario analysis and stress testing
  • Investments
  • Disclosures.

The publication of the Application Paper follows a 90-day consultation period during wich 25 stakeholders and members gave valuable input resulting in various improvements to the draft Paper. The outcome of the consultation can be accessed here.

Interested stakeholders are invited to a webinar providing more background on the Paper and a question and answer session on 9 June, from 13.00 – 14.00 CEST. More information and a registration link can be found here.

SIF January to June 2020 Update

The Sustainable Insurance Forum’s half-yearly report lays out its myriad successes in the first six months of the year, despite the catastrophic disruption caused by COVID. The report includes updates from 14 of its members and highlights the need to keep the sustainability agenda and climate change at the forefront of discussions and decisions about how best to deal with a post-COVID regulatory landscape.

Question Bank on Climate Change Risks to the Insurance Sector

This document is the Public Version of the Sustainable Insurance Forum (SIF) Question Bank on Climate Change Risks to the insurance sector. This Question Bank is intended to help supervisors develop engagement tools to better understand exposures and strategic responses of regulated entities to climate change risks and opportunities. The objective is to provide a framework, and example questions, which supervisors can adapt for use in their own jurisdictions – depending on local market contexts, objectives, areas of interest, and levels of sophistication with climate change issues.

Issues Paper on the Implementation of the Recommendations of the Task Force on Climate-Related Financial Disclosures

A vast majority of insurers expect climate change to affect their business; however, while the largest globally active insurers have made progress on implementation of TCFD-aligned disclosures, implementation is low across the sector as a whole. Recognising the diversity of supervisory frameworks across jurisdictions, this Paper identifies a number of areas where supervisors can encourage strengthened disclosures through the application of existing supervisory tools.

Turning up the heat – Climate Risk Assessment in the Insurance Sector

This paper covers climate risk assessment from both regulatory and supervisory perspectives. Based primarily on a survey of 18 insurance authorities, it describes the range of regulatory approaches that specify how insurers are expected to assess their climate risk exposures and techniques that supervisors can use to conduct their own assessment of climate risks. In most cases, supervisors rely on existing rules related to enterprise risk management (ERM) to express their expectations to insurers on how climate risk should be assessed, addressed and managed.

Issues Paper on Climate Change Risks to the Insurance Sector

The objectives of this Issues Paper, jointly published by the SIF and the IAIS, are to raise awareness for insurers and supervisors of the challenges presented by climate change, including current and contemplated supervisory approaches for addressing these risks. It provides an overview of how climate change is currently affecting and may affect the insurance sector now and in the future, provides examples of current material risks and impacts across underwriting and investment activities, and describes how these risks and impacts may be of relevance for the supervision and regulation of the sector. It explores potential and contemplated supervisory responses, and reviews observed practices in different jurisdictions. In doing so, it identifies gaps and emerging areas which need to be resolved to allow for effective supervision. Finally, the paper offers preliminary insights from practice, and initial conclusions relating to the supervision of climate change risks to the insurance sector.

Sustainable Insurance: The emerging agenda for Supervisors and Regulators

Key sustainability factors are now recognized as potentially significant for the success, safety and soundness of the insurance sector – inspiring reactions by supervisors and regulators. In its role as risk manager, risk carrier and investor, the global insurance sector plays a cornerstone role in the management of sustainability-related risks and opportunities. The risk transfer tools of insurance along with the deployment of its long-term capital base are highly relevant for many of the 17 Sustainable Development Goals (SDGs) and the goals of the Paris Agreement on climate change.

Insurance 2030: Harnessing Insurance for Sustainable Development

This report presents a suite of options that could strengthen the alignment between the insurance industry and sustainable development through to 2030. It highlights a number of existing innovations such as use of sustainability risk management frameworks, data-sharing on environmental hazards, and innovations such as index-linked insurance and microinsurance.