IAIS reports on first quantitative study on climate change impacts on insurers’ investments

The International Association of Insurance Supervisors (IAIS) has published the 2021 special topic edition of its Global Insurance Market Report (GIMAR). As a first global quantitative study, the report “The Impact of Climate Change on the Financial Stability of the Insurance Sector” assesses how insurance sector investments are exposed to climate change.

Quantitative and qualitative data was gathered from 32 IAIS Members covering 75% of the global insurance sector. The reports findings include:

• More than 35% of insurers’ invested assets are exposed to risks from climate change, according to data covering 75% of the global insurance sector;
• Scenario analysis confirms significant benefits of an orderly transition towards internationally agreed climate targets from both a financial stability and solvency perspective.

The report provides important insurance supervisory perspective in international efforts to identify and address data gaps and analyse financial stability risks.