(Re)insurers already contribute to a sustainable economy The insurance industry is committed to contributing to collective efforts to make the economy more sustainable ◼ Policymakers, businesses and consumers must understand the scope and scale of the impact of climate change on various risks. [...] Possible solutions to overcome current limitations ◼ To increase the range of firms in which (re)insurers can invest, policymakers are encouraged to share their expectations and to indicate clearly defined trajectories to facilitate the transformation of the real economy. [...] At the same time, it is critical that regulators recognise the importance of enabling insurers to make a profit in order to uphold the robustness of the industry and its ability to fulfil its obligations to policyholders. [...] Before such treatment is hard-wired into regulations, it is important to step back and evaluate the objectives and guiding principles of prudential regulation in the context of climate/environment-related risks, given the global nature of the issues and the importance of globally consistent supervision. [...] ◼ GFIA is of the view that the objective of any sector-wide, climate-related stress-testing exercises should be exploratory: to help develop and improve the capacity of institutions to integrate climate risk into the measurement, evaluation and day-to-day management of their financial risks.
- Pages
- 7
- Published in
- Canada
