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.