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October 04, 2021 at 01:26 PM
What You Need to Know
- The International Association of Insurance Supervisors received data from 32 member jurisdictions.
- Analysts looked at how mild, moderate and moderately severe climate change might affect insurer assets.
- The analysts say severe change could cut global insurer assets by 3%.
The International Association of Insurance Supervisors says that regulators should collect information about how climate change could affect insurers’ investments, and that insurers should talk about how climate change could affect their solvency.
The IAIS gives those recommendations at the end of a new analysis of what climate change could do insurers’ assets.
A team at the Basel, Switzerland-based regulator group collected climate change survey data from 32 member jurisdictions.
The analysts looked at three scenarios, including a moderately severe “too little, too late” scenario, in which the average world temperature increases by 3 degrees Celsius, but civilization does well enough for insurers to continue to exist.
In the moderately severe scenario, financial stress could cut assets by about 3% at all of the world’s insurers, and by about 2% at North American insurers, the analysts predict.
The analysts emphasize that they started with incomplete data and incomplete forecasts about how climate change might affect different sectors of the economy.
