Sustainable finance

Sustainable finance in the insurance and pensions sector

Sustainability is at the heart of the EU project and is key in ensuring long-term competitiveness of the EU economy and with it, the insurance and pensions sector.

Insurers and pension funds, as managers of large parts of society’s risks and important long-term investors have a particular interest in mitigating the impact of climate change and  facilitating the transition to a more sustainable and resilient economy.

By integrating sustainability considerations from an environmental, social and governance (ESG) perspective into the regulatory and supervisory framework for insurers, reinsurers, insurance distributors and pension providers, EIOPA contributes to the European Commission's Sustainable Finance Action Plan and to the ‘Green Deal’.

EIOPA has been implementing an ambitious strategic plan on sustainability and climate change with the following objectives: 

  • Insurers should manage and mitigate ESG risks through their underwriting activity;
  • Insurers and pension funds should reflect policyholder and pension scheme member preferences for sustainable investments, where relevant; 
  • Insurers and pension funds should adopt a sustainable approach in their investments based on principles of stewardship

EIOPA’s projects in sustainable finance

EIOPA has been carrying out several projects to establish its policy on sustainable finance and to develop tools and methods for ESG risk analysis, with a view to embed ESG risk analysis in regulation as well as in supervision.

EIOPA publically consults and organizes regular Roundtables on Sustainable Finance, to discuss its proposals with participants from EIOPA’s Stakeholder Groups, the European Commission, representatives of the insurance and pensions, asset management and rating industries, and representatives of consumers associations and civil society.

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EIOPA is a member of the Network for Greening the Financial System and of the Sustainable Insurance Forum, as well as the European Commission's Sustainable Finance Platform for the taxonomy on sustainable economic activities.

In addition, EIOPA is aiming to improve its own environmental performance as an institution and to lower its impact on the environment. EIOPA has registered to the EMAS (Eco Management and Audit Scheme).

EIOPA’s mandate on sustainable finance, following the review of its founding regulation, is to:

  • take into account sustainable business models and integration of ESG-related factors in the areas of its competence, 
  • develop criteria for identifying systemic risks and an adequate stress-testing regime, including potential environmental-related systemic risk, 
  • put in place a monitoring system, and 
  • develop common methodologies for union-wide assessment of resilience of financial undertakings taking into account risks stemming from adverse environmental developments and of the effect of environmental risks on the financial stability of financial institutions.

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Solvency requirements

Technical standards

Petra Hielkema | Solvency II | Sustainability

A supervisor’s perspective: 10 days in

Ladies and gentlemen, Thank you for this invitation to speak at Eurofi both to the organisation as well as the Slovenian Presidency. It is a wonderful event and I am happy to participate even though it is via a screen and not in person. Only last week I started as the new chairperson of EIOPA and...
Petra Hielkema | Sustainability

Climate change: A challenge for our time

What is the actual role and contribution of insurance undertakings regarding their ESG risk mitigation in the EU economy? There is a growing urgency to tackle environmental, social and governance-related risks. As news of devastating natural catastrophes fills our screens and we see first-hand the...
Risk assessment | Financial stability

ESAs highlight risks in phasing out of crisis measures and call on financial institutions to adapt to increasing cyber risks

The three European Supervisory Authorities (EBA, EIOPA and ESMA - ESAs) issued today their second joint risk assessment report for 2021 . The report highlights the increasing vulnerabilities across the financial sector, the rise seen in terms of cyber risk and the materialisation of event-driven...
Risk assessment

Joint Committee Report on risks and vulnerabilities in the Eu financial system - Autumn 2021

The report highlights the increasing vulnerabilities across the financial sector, the rise seen in terms of cyber risk and the materialisation of event-driven risks.
Sustainability | Ana Teresa Moutinho

Digital operational resilience: Addressing risks of the digital transformation

Digital operational resilience is essential for a well-functioning financial services sector. As the digital transformation of the sector accelerates, addressing the risks of digital innovation becomes increasingly important. The proposal for a Digital Operational Resilience Act – or DORA, as part...
Sustainability

5th EIOPA Sustainable Finance Roundtable

The 5th EIOPA sustainable finance roundtable will take place on 7 December 2021 . Join us to discuss with stakeholders and experts the vital role that insurance and pensions play in strengthening society’s resilience to sustainability risks. Hear from EIOPA about the work it is conducting to ensure...
Disclosure | Consumer protection

Consumer disclosures: what needs to change?

Save the date : 27 & 28 October 2021 (morning) Join EIOPA’s workshop on Consumer Disclosures to explore how current approaches to disclose information about insurance and pension products can be improved to work better for consumers. In this workshop we aim to gather ideas and feedback from a...
Reporting | Supervision | Disclosure

EIOPA consults on the amendments of supervisory reporting and disclosure requirements

The European Insurance and Occupational Pensions Authority (EIOPA) published today a consultation on the amendments of supervisory reporting and disclosure requirements under Solvency II . After a number of years of the implementation of Solvency II and the information received by national...
Reporting | Supervision | Disclosure

Consultation on the amendments of supervisory reporting and public disclosure documents

After a number of years of the implementation of Solvency II and the information received by national supervisory authorities it is important to ensure that the regular supervisory reporting remains fit for purpose. The analysis over the last years lead to a number of proposals to amend the...
ORSA

Supervisory statement on the ORSA in the context of COVID-19

The European Insurance and Occupational Pensions Authority (EIOPA) published today the supervisory statement on Own Risk and Solvency Assessment (ORSA) in the context of COVID-19 pandemic. With the aim to foster supervisory convergence, EIOPA in this supervisory statement focuses on the supervision...
ORSA

Supervisory Statement on ORSA in the context of COVID-19

The supervisory statement on Own Risk and Solvency Assessment (ORSA) in the context of COVID-19 pandemic focuses on the supervision of the internal processes of undertakings that are necessary for having a good quality ORSA in place. The statement is accompanied with the resolution of comments from...
Risk assessment | Supervision

Opinion on the use of risk mitigation techniques by insurance undertakings

The Opinion addresses the use of risk mitigation techniques and includes a set of recommendations addressed to national competent authorities (NCAs) to ensure convergent supervision. This Opinion raises awareness about the importance to have a proper balance between the risk effectively transferred...
Solvency requirements | Supervision

Supervisory statement on supervisory practices and expectations in case of breach of the Solvency Capital Requirement

The European Insurance and Occupational Pensions Authority (EIOPA) published today the statement on supervisory practices and expectations in case of breach of the Solvency Capital Requirement (SCR) . With this supervisory statement EIOPA aims to foster supervisory convergence in the situations...
Risk assessment | Solvency requirements | Supervision

Opinion on the use of risk mitigation techniques by insurance undertakings

The European Insurance and Occupational Pensions Authority (EIOPA) has published today an Opinion on the use of risk mitigation techniques by insurance undertakings . Since the implementation of Solvency II new risk mitigation techniques such as new reinsurance structures have appeared in the...
Risk assessment | Solvency requirements | Supervision

Opinion on the use of risk mitigation techniques by insurance undertakings

The European Insurance and Occupational Pensions Authority (EIOPA) has published today an Opinion on the use of risk mitigation techniques by insurance undertakings . Since the implementation of Solvency II new risk mitigation techniques such as new reinsurance structures have appeared in the...
Solvency requirements | Sustainability | Impact underwriting

EIOPA further contributes to sustainable finance

The European Insurance and Occupational Pensions Authority (EIOPA) issued today three publications as part of its activities on sustainable finance. The work addresses key issues of climate change-related risk for the insurance sector and continues to encourage insurers to play their role of...
Solvency requirements | Sustainability | Impact underwriting

EIOPA further contributes to sustainable finance

The European Insurance and Occupational Pensions Authority (EIOPA) issued today three publications as part of its activities on sustainable finance. The work addresses key issues of climate change-related risk for the insurance sector and continues to encourage insurers to play their role of...
Solvency requirements | Sustainability | Impact underwriting

EIOPA further contributes to sustainable finance

The European Insurance and Occupational Pensions Authority (EIOPA) issued today three publications as part of its activities on sustainable finance. The work addresses key issues of climate change-related risk for the insurance sector and continues to encourage insurers to play their role of...
Sustainability | Impact underwriting

Report on non-life underwriting and pricing in light of climate change

The frequency and severity of natural catastrophes is expected to increase due to climate change. As underwriters of natural catastrophe risks, the (re)insurance sector can be particularly impacted by climate change. The increasing risk can lead to insurance coverage becoming unaffordable for the...
Sustainability | Impact underwriting

Report on non-life underwriting and pricing in light of climate change

The frequency and severity of natural catastrophes is expected to increase due to climate change. As underwriters of natural catastrophe risks, the (re)insurance sector can be particularly impacted by climate change. The increasing risk can lead to insurance coverage becoming unaffordable for the...
Solvency requirements | Sustainability

Methodological paper on potential inclusion of climate change in the Nat Cat standard formula

The frequency and severity of natural catastrophes is expected to increase due to climate change. To ensure continuing policyholder protection and stability of the insurance market, the Solvency Capital Requirements (SCR) for natural catastrophe underwriting risk should reflect the expected impact...
Solvency requirements | Sustainability

Methodological paper on potential inclusion of climate change in the Nat Cat standard formula

The frequency and severity of natural catastrophes is expected to increase due to climate change. To ensure continuing policyholder protection and stability of the insurance market, the Solvency Capital Requirements (SCR) for natural catastrophe underwriting risk should reflect the expected impact...
Sustainability | Financial stability

Climate change, catastrophes and the macroeconomic benefits of insurance

This article considers the protective role that insurance can play in mitigating the negative macroeconomic and welfare impact of catastrophes, and the interplay between climate change and insurance coverage. The article first develops a theoretical model of insurance, climate change, catastrophes...
Taxonomy | Sustainability

Taxonomy-related product disclosures

The European Supervisory Authorities (ESAs) are organising an online public event on 29 April, from 13:00-17:30 During this event the ESAs will present their proposals and open a dialogue with stakeholders on draft Regulatory Technical Standards (RTS) on the content and presentation of product...