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InvestmentsReuters Events-EU watchdog says insurers could face climate tests in 2023 By...

Reuters Events-EU watchdog says insurers could face climate tests in 2023 By Reuters

© Reuters. FILE PHOTO: Steam rises from the Niederaussem lignite energy plant, in Niederaussem, Germany, January 16, 2020. REUTERS/Wolfgang Rattay

By Carolyn Cohn and Huw Jones

LONDON (Reuters) – Insurers could face European climate stress tests as quickly as 2023, the top of the EU’s insurance coverage regulator mentioned on the Reuters Future of Insurance Europe convention on Thursday.

The insurance coverage business faces publicity to climate change threat each by its underwriting of fossil fuels and thru the funding portfolios of particular person insurers.

Petra Hielkema, chairperson of the European Insurance and Occupational Pensions Authority (EIOPA), mentioned though the tests will happen by 2024 on the newest “it might be we want to do this one quicker”.

But Hielkema, who was talking on a panel on climate change, mentioned there was “no concrete planning” for 2023 tests but.

Hielkema mentioned stress tests for pension funds subsequent 12 months have been additionally prone to give attention to climate change.

Anna Sweeney, the Bank of England’s govt director for insurance coverage, mentioned the central financial institution was in the method of conducting its first climate stress tests for banks and insurers, with outcomes due in the primary quarter of 2022.

“We’ve had to ask for resubmissions from some firms where we have felt that there hasn’t been enough due diligence…or enough clarity,” she informed the panel.

To view video, click on: https://vimeo.com/642406430/6267b6e568

Hielkema and Sweeney each mentioned their tests wouldn’t be targeted on capital necessities. Hielkema mentioned using a carbon tax was a greater technique to encourage firms to sort out climate change threat than imposing capital necessities.

Alison Martin, EMEA CEO for Zurich Insurance, additionally informed the panel {that a} carbon worth was wanted “as part of a suite of mechanisms to help us get to the transition”.

“We have nearly 70 different versions of carbon price mechanisms…there’s a challenge to get to something which is harmonised,” Martin mentioned.

Delegates on the U.N. climate convention in Glasgow are wrangling over the principles round Article 6, the part of the U.N. Convention on Climate Change that offers with markets for buying and selling carbon emissions that proceed to be emitted.

One of the hardest duties will probably be in synchronizing international guidelines round these markets, in addition to in agreeing on a world worth for carbon.

Marie Niemczyk, head of insurance coverage relations at funding agency Candriam, informed the panel {that a} carbon worth could be a really great tool in investing, however “it needs to be high enough to actually have a deterrent effect”.

For extra on the Reuters Future of Insurance Europe convention please click on right here https://reutersevents.com/events/insuranceeurope

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