Tackling climate change means businesses have to build in proper risk assessment, says Zsuzsanna Schiff.
“Climate change and society’s response to it presents financial risks to insurers. While these risks will crystallise in full over the coming decades, they are already becoming apparent. The PRA expects insurers to take a strategic approach to addressing the risks from climate change” – these are the words from David Rule, executive director of insurance supervision, PRA.
In Supervisory Statement (SS3/19) Enhancing banks’ and insurers’ approaches to managing the financial risks from climate change, the PRA outlines its expectations. It intentionally moves away from the CSR lens and concentrates on the financial risks arising from climate change. This is being further emphasised by including these risks in the 2019 insurance stress test.
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