Insurance Supervisors from 18 Jurisdictions set out next steps to address Climate Change Risks in 2019
Luxembourg/Geneva
The Sustainable Insurance Forum (SIF), the global leadership group for insurance supervisors working on sustainability and climate issues, recently held its Fifth meeting alongside the Annual Conference of the International Association of Insurance Supervisors (IAIS) in Luxembourg. Following from the release of a joint Issues Paper on Climate Change Risks co-authored with the IAIS in July 2018, the SIF has focused its attention on the development of practical tools, to support supervisors’ efforts to mainstream climate change issues into everyday practices.
At the IAIS meetings, the Executive Committee requested that the SIF and the IAIS develop a further Issues Paper in 2019, focusing on best practices for implementation of the Recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), and the role of supervisors in support adoption. This mandate set the scene for the SIF’s private meeting, where supervisors from 18 jurisdictions gathered to develop an action plan for the SIF’s work in 2019.
During the closed meeting, supervisors shared updates on how they are tackling climate change in their jurisdictions – illustrating a diversity of approaches and focus areas, ranging from access to insurance for natural catastrophe events to forward-looking analysis of investments in high-carbon sectors. Supervisors then reviewed new tools to address climate change risks, including a Question Bank that can be applied to on-site supervisory meetings, off-site supervisory reviews, surveys, and other activities.
Going forward in 2019, supervisors agreed with the Secretariat that the SIF will undertake work in six areas, including:
i. Conducting outreach to raise awareness of the findings of the 2018 Issues Paper on Climate Change risks, and support capacity building efforts relating to climate issues,
ii. Developing an Issues Paper on TCFD adoption and insurance supervision, on the basis of a global survey to be undertaken in Q1 2019, jointly together with the IAIS Secretariat,
iii. Establishing a Working Group of supervisors committing to implement the Question Bank into supervisory practices,
iv. Establishing a Special Projects Group to identify priorities for research and analysis, and conduct joint projects on new and emerging issues,
v. Engaging as Observers in the Central bank and supervisors Network for Greening the Financial System (NGFS),
vi. Developing strategic communications, including thought leadership on emerging issues.
The SIF’s focus on TCFD implementation mirrors the rapid scaling-up of industry-led efforts to enhance climate change disclosures – such as the recent launch of a UN-convened Pilot Group of 16 major insurers to develop analytical tools to pioneer climate risk disclosures in the insurance sector, under the UN Principles for Sustainable Insurance (PSI) Initiative. Going forward, the SIF’s work on industry practices – alongside ongoing process of Question Bank implementation – will help supervisors evaluate best practices relating to climate change risks, laying the groundwork for a future Applications paper which would provide further guidance for supervisors.
Geoff Summerhayes, Chair of the SIF, said: “The SIF is pleased to announce its intention to launch a global survey in its member jurisdictions to assess level of awareness, adoption and maturity with respect to the Recommendations of the TCFD on climate change disclosures by insurers. Working in partnership, the SIF will support IAIS to increase its focus on emerging risks and trends, including climate risks and sustainable development – through monitoring, standard-setting and guidance where appropriate, and support for implementation.”
Dave Jones, Commissioner of the California Department of Insurance and Founding Chair of the SIF, said: “The SIF made great progress this year in authoring an important Joint Issues Paper on Climate Risks with the International Association of Insurance Supervisors, and now is moving into implementation mode with its new Question Bank. When we launched the group in December 2016, we did not dream we would make so much progress in such a relatively short period of time. Thanks to my colleagues for the privilege of serving as the Founding Chair of this important group.”
Notes to Editors
SIF/IAIS Issues Paper on Climate Change Risks to the Insurance Sector available at:
https://sustainableinsuranceforum.org/publication/issues-paper-on-climate-change-risks-to-the-insurance-sector/
SIF/IAIS Press Release on Issues Paper on Climate Change Risks to the Insurance Sector:
https://sustainableinsuranceforum.org/new-paper-calls-on-insurance-sector-to-intensify-climate-risk-scrutiny/
UNEP-FI Principles for Sustainable Insurance Press Release on TCFD Pilot Group: http://www.unepfi.org/psi/wp-content/uploads/2018/11/PSI-TCFD-Insurer-Pilot-Group-Press-Release.pdf