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.

At its latest Roundtable on Sustainable finance, EIOPA stressed the importance for insurers and pension funds to manage sustainability risks as part of their risk management, as well as to contribute to reducing risks to sustainability for 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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Shared resilience solutions | Protection gap | Sustainability | COVID-19

EIOPA addresses measures to improve the insurability of business interruption risk in light of pandemics

The European Insurance and Occupational Pensions Authority (EIOPA) published today its staff paper on measures to improve the insurability of business interruption in light of pandemics. Building on the Issues paper on shared resilience solutions for pandemics published in July, EIOPA analyses...
Shared resilience solutions | Protection gap | Sustainability | COVID-19

EIOPA addresses measures to improve the insurability of business interruption risk in light of pandemics

The European Insurance and Occupational Pensions Authority (EIOPA) published today its staff paper on measures to improve the insurability of business interruption in light of pandemics. Building on the Issues paper on shared resilience solutions for pandemics published in July, EIOPA analyses...
Shared resilience solutions | Protection gap | Sustainability | COVID-19

EIOPA addresses measures to improve the insurability of business interruption risk in light of pandemics

The European Insurance and Occupational Pensions Authority (EIOPA) published today its staff paper on measures to improve the insurability of business interruption in light of pandemics. Building on the Issues paper on shared resilience solutions for pandemics published in July, EIOPA analyses...
Sustainability | Disclosure

The three European Supervisory Authorities publish Final Report and draft RTS on disclosures under SFDR

The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) delivered today to the European Commission (EC) the Final Report , including the draft Regulatory Technical Standards (RTS), on the content, methodologies and presentation of disclosures under the EU...
Sustainability | Disclosure

The three European Supervisory Authorities publish Final Report and draft RTS on disclosures under SFDR

The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) delivered today to the European Commission (EC) the Final Report , including the draft Regulatory Technical Standards (RTS), on the content, methodologies and presentation of disclosures under the EU...
Sustainability | Disclosure

Final Report on draft Regulatory Technical Standards

The European Supervisory Authorities (ESAs) have developed through the Joint Committee (JC) draft Regulatory Technical Standards (RTS) with regard to the content, methodologies and presentation of sustainability-related disclosures under empowerments Articles 2a, 4(6) and (7), 8(3), 9(5), 10(2) and...
Sustainability | Disclosure

Final Report on draft Regulatory Technical Standards

The European Supervisory Authorities (ESAs) have developed through the Joint Committee (JC) draft Regulatory Technical Standards (RTS) with regard to the content, methodologies and presentation of sustainability-related disclosures under empowerments Articles 2a, 4(6) and (7), 8(3), 9(5), 10(2) and...
Risk assessment | Stress test

Methodological principles of insurance stress testing - liquidity component

The paper sets out methodological principles that can be used to design bottom-up stress test exercises to assess the vulnerability of insurers to liquidity shocks. The conclusions are based on the current understanding and knowledge of the liquidity risk in the insurance industry.
Risk assessment | Stress test

EIOPA publishes the second paper on the methodological principles of insurance stress testing with focus on liquidity

The European Insurance and Occupational Pensions Authority (EIOPA) published today the second paper in a series of papers on the methodological principles of insurance stress testing. The Methodological Paper is a follow-up to the consultation with stakeholders and focuses on the liquidity...
ORSA | COVID-19

EIOPA consults on ORSA in the context of COVID-19

The European Insurance and Occupational Pensions Authority (EIOPA) published today a consultation on the Supervisory Statement on Own Risk Solvency Assessment (ORSA) in the context of COVID-19 . The statement promotes convergence by guiding undertakings through common supervisory expectations on...
ORSA | COVID-19

Consultation on the Supervisory Statement on ORSA in the context of COVID-19

The statement promotes convergence by guiding undertakings through common supervisory expectations on the ORSA in the current situation triggered by the pandemic, taking into account that the impact on each individual undertaking can differ depending on its specific risk profile. A proper balance...
Sustainability

Integrating sustainability into the supervisory framework: Fourth sustainable finance roundtable

Insurers and pensions funds can play a powerful role in mitigating the impact of climate change and facilitating the transition to a more sustainable and resilient economy. This was one of the key messages that Gabriel Bernardino, Chair of the European Insurance and Occupational Pensions Authority...
Risk assessment | Financial stability

Financial Stability Report December 2020

The December 2020 Financial Stability Report sheds light on the financial stability risks in the European insurance and pension sector.
Risk assessment | Financial stability

EIOPA outlines key financial stability risks and vulnerabilities for insurance and pension sector and recommends that any dividend distributions should not exceed thresholds of prudency

The European Insurance and Occupational Pensions Authority (EIOPA) published today its December Financial Stability Report that sheds light on the financial stability risks in the European insurance and pension sector. Although financial markets have gradually stabilised after the initial sharp...
Reporting | Sustainability

ESAs issue a comment letter to the IFRS Foundation’s consultation

The Chairs of the three European Supervisory Authorities, EBA, EIOPA and ESMA, have issued a comment letter to the IFRS Foundation’s consultation. The joint the letter emphasises the following aspects: (i) the global challenges posed by sustainability for investors and other stakeholders and their...
Sustainability | Gabriel Bernardino

Sustainable finance: From policy to practice

Ladies and gentlemen Introduction First of all, let me wish you a warm welcome to today’s roundtable. This is our fourth sustainable finance roundtable and I am pleased to see that we have had so much interest in this event. Pleased but not surprised. Not surprised because it’s clear that...
Risk assessment | Sustainability

Sensitivity analysis of climate-change related transition risks

The report explores current holdings of corporate bonds and equity that can be related to key climate-policy relevant sectors such as fossil fuel extraction, carbon‐intensive industries, vehicle production and the power sector. It also quantifies potential climate-change related transition risks...
Risk assessment | Sustainability

Sensitivity analysis of climate-change related transition risks

The report explores current holdings of corporate bonds and equity that can be related to key climate-policy relevant sectors such as fossil fuel extraction, carbon‐intensive industries, vehicle production and the power sector. It also quantifies potential climate-change related transition risks...
Sustainability

Sensitivity analysis of climate-change related transition risks: EIOPA’s first assessment

The European Insurance and Occupational Pensions Authority (EIOPA) published today its sensitivity analysis of climate-change related transition risks in the investment portfolio of European insurers. The report explores current holdings of corporate bonds and equity that can be related to key...
Sustainability | Impact underwriting

Ensuring the availability and affordability of insurance in light of climate change: Discussion paper on non-life underwriting and pricing

Today, the European Insurance and Occupational Pensions Authority (EIOPA) has published a discussion paper on non-life underwriting and pricing in light of climate change . The discussion paper highlights challenges associated with current non-life underwriting practices and options to ensure the...
Sustainability | Impact underwriting

Ensuring the availability and affordability of insurance in light of climate change: Discussion paper on non-life underwriting and pricing

Today, the European Insurance and Occupational Pensions Authority (EIOPA) has published a discussion paper on non-life underwriting and pricing in light of climate change . The discussion paper highlights challenges associated with current non-life underwriting practices and options to ensure the...
Sustainability | Impact underwriting

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

The discussion paper highlights challenges associated with current non-life underwriting practices and options to ensure the availability and affordability of insurance products, in the context of climate change. The discussion paper builds on work stemming from the Opinion on sustainability within...
Sustainability | Impact underwriting

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

The discussion paper highlights challenges associated with current non-life underwriting practices and options to ensure the availability and affordability of insurance products, in the context of climate change. The discussion paper builds on work stemming from the Opinion on sustainability within...
Protection gap | Sustainability

The pilot dashboard on insurance protection gap for natural catastrophes

This is the first pilot dashboard which depicts the insurance protection gap for natural catastrophes. The aim is to represent the drivers of a climate-related insurance protection gap in order to identify measures that will help in decreasing society’s losses in the event of natural catastrophes...
Protection gap | Sustainability

The pilot dashboard on insurance protection gap for natural catastrophes

This is the first pilot dashboard which depicts the insurance protection gap for natural catastrophes. The aim is to represent the drivers of a climate-related insurance protection gap in order to identify measures that will help in decreasing society’s losses in the event of natural catastrophes...
Sustainability

EIOPA’s pilot dashboard addresses the natural catastrophe protection gap

Today, the European Insurance and Occupational Pensions Authority (EIOPA) launched its first pilot dashboard , which depicts the insurance protection gap for natural catastrophes. The aim is to represent the drivers of a climate-related insurance protection gap in order to identify measures that...
Solvency II | Solvency requirements | Sustainability

Discussion Paper: Methodology on potential inclusion of climate change in the nat cat standard formula

This Discussion Paper is a follow-up to EIOPA’s Opinion on Sustainability within Solvency II (EIOPA, 2019). The opinion highlighted that further work is needed to investigate whether additional climate change-related perils such as droughts and wildfire could be better captured in the Solvency II...