EIOPA plans to carry out a focused analysis of the sensitivity of insurers' balance sheet to climate-change related financial risks. The work is a pilot/learning exercise which aims to support future work and possible future stress-testing.
The main objective of this work is to assess key financial risks embedded in insurers' asset portfolios in relation to the transition to a low-carbon economy. A secondary objective is to assess additional risks related to claims inflation and insurance availability in increased natural catastrophe scenarios associated with climate change.
EIOPA is currently exploring the methodological aspects of such an exercise and engaging with various counterparts, both internally and externally. In order to support this effort, EIOPA is organising a workshop on the 27 February in Frankfurt am Main. A draft discussion paper (see link below) is publish ahead of the workshop. It describes the framework for the 2020 sensitivity analysis and provides some key preliminary findings based on parts of the methodology under consideration for this exercise. It is intended to stimulate and inform the debate at the workshop, and to seek inputs from interested parties.
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