News and Events
10 April 2018: The European Insurance and Occupational Pensions Authority (EIOPA), which has been collaborating informally with the SIF over the past few months, has become a full member of the SIF.
6 April 2018: Joint SIF-IAIS Issues Paper on Climate Change Risks to the Insurance Sector Released for Public Consultation
The International Association of Insurance Supervisors (IAIS), jointly with the Sustainable Insurance Forum (SIF), has released a draft Issues Paper on Climate Change Risks to the Insurance Sector for public consultation.
This paper is a significant milestone for the IAIS and the SIF – and is groundbreaking in confirming that climate risks present significant material challenges for the insurance sector, which require “ongoing and intensifying scrutiny” by insurance supervisors. This is the first time that a global financial authority has explored how climate change relates to its core standards (in this case, the ICPs) – jointly drawing on the expertise of a leadership group of supervisors from around the world.
The purpose of this Issues Paper is to raise awareness for insurers and supervisors of the challenges presented by climate change, and explore how supervisors can respond. It provides an overview of how climate change is currently affecting and may affect the insurance sector now and in the future, provides examples of current material risks and impacts across underwriting and investment activities, and describes how these risks and impacts may be of relevance for the supervision and regulation of the sector.
Most importantly, the paper sets out current and contemplated supervisory approaches for addressing climate risks, providing a set of options for supervisors to consider in line with their mandates, statutory responsibilities, and strategic objectives. Ten case studies, provided by SIF members, set out the “state of the art” on supervision of climate risk in insurance globally.
Speaking at the Inaugural meeting of the Central Bank and Supervisors Network for Greening the Financial System in Amsterdam, Geoff Summerhayes, SIF Chair, said: “The SIF has drawn on the expertise and enthusiasm of likeminded supervisors, and has welcomed the help of the IAIS taking forward joint work. This Issues Paper is at the nexus of that collaboration – and is an important stepping stone towards building supervisory understanding of climate risks at the global level.”
The paper, and consultation response portal, can be accessed on the IAIS website: https://www.iaisweb.org/page/consultations/current-consultations/draft-issues-paper-on-climate-change-risks-to-the-insurance-sector. All interested parties are encouraged to provide comments. The deadline for responses is 29 April 2018.
Download the press release here.
5 February 2018: APRA Executive Board Member Geoff Summerhayes named as new Chair of the Sustainable Insurance Forum
Mr. Geoff Summerhayes, Executive Board Member at the Australian Prudential Regulation Authority, has been named the new Chair of the Sustainable Insurance Forum (SIF). Mr. Summerhayes succeeds Commissioner Dave Jones of the California Department of Insurance, who served as Chair from the launch of the SIF in December 2016 to the end of January 2018. Commissioner Jones was instrumental in guiding the work of the Forum during its first phase, including the release of the SIF’s joint statement in support of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures recommendations, the SIF’s global stock-take publication of supervisory and regulatory action on sustainability issues, and its engagement with the International Association of Insurance Supervisors (IAIS) on climate change topics.
Going forward, Mr. Summerhayes will advance the work of the SIF across its work programme areas, with a specific focus on joint activities on climate change in collaboration with the IAIS. In 2017 Mr. Summerhayes played an important role in motivating the IAIS to apply greater focus on climate and sustainability issues as strategic priorities, including through his capacity as member of the IAIS Executive Committee. Geoff’s role as an ambassador between the SIF and the IAIS was reinforced at the recent Executive Committee meetings in January, where he was chosen to champion climate change as a strategic risk priority. In 2018, key outputs will include a joint SIF-IAIS Issues Paper on Climate Change Risk to the Insurance Sector, which will lay the groundwork for global best-practice guidance for supervisors on climate issues.
Reflecting on his time as Chair, Commissioner Jones said: “It has been a pleasure to serve as the initial Chair of the SIF – and I remain very impressed at the rapid progress the SIF has made as a collaborative leadership group. This club of supervisors is unique among regulatory bodies – and I am delighted to see that our work is inspiring other supervisors and central banks to take action on climate and sustainability issues.”
On taking up his new role as Chair, Mr. Summerhayes said: “I am honoured to succeed Commissioner Jones as the Chair of the SIF. Building on the Commissioner’s vision, the SIF has grown rapidly into the role of a trusted partner with the IAIS on climate and sustainability issues – and I aim to take this collaboration to the next level over coming months. I look forward to engaging with new members as we tackle a three-pillar programme of work across climate issues, promotion of sustainable insurance, and disaster risk resilience in 2018.”
29 November 2017: APRA Executive Board Member Geoff Summerhayes made a speech to the Centre for Policy Development in Sydney, describing how the transition to a low-carbon economy is now in motion – posing strategic challenges for Australian financial institutions. The speech, entitled “The Weight of Money: A Business Case for Climate Resilience“, sets out examples of how climate-related financial risks are manifesting in Australia, explains APRA’s responses and describes how the SIF is enabling international cooperation.
3 November 2017: The SIF held a meeting alongside the annual meeting of the International Association of Insurance Supervisors (IAIS).
27 October 2017: Nick Robins and Dave Jones published an op-ed, Insuring the Future.
21 September 2017: Superintendencia de Seguros de la Nación (SSN), the Argentinan Insurance Regulator, has taken an unprecedented step of simultaneously joining the Sustainable Insurance Forum and Joining the UN Principles for Sustainable Insurance as a Supporting Institution.
Superintendent Juan Pazo said: “As insurance supervisors, our goal is to promote a responsible, sustainable and resilient market. We are focused on developing financial tools and new products, in order to increase the availability of insurance to underserved population. Aligned with the UN Sustainable Development Goals for 2030, our priority is to secure sustainable development, focusing on three topics: access to insurance, climate change and economic sustainability. In this direction, committing to the PSI Initiative, will not only strengthen the insurance sector, but also, allow us to face the upcoming challenges.”
25 July 2017: The SIF released a joint statement on behalf of supervisors and regulators in 16 jurisdictions welcoming the recommendations and guidance of the Financial Stability Board (FSB) Task Force on Climate-related Financial Disclosures (TCFD).
16 June 2017: In its Q2 2017 Quarterly Bulletin, the Bank of England sets its strategic response to climate change, including participating in the Sustainable Insurance Forum.
12 February 2017: SIF submits response to FSB Consultation.
In February 2017, the SIF delivered a coordinated response to the FSB Task Force on Climate-related Financial Disclosures Recommendations report consultation. The response focused on three dimensions: i) Understanding role of insurance supervisors as users of disclosure; ii) Amendments to the recommendations; and iii) The role of supervisors in promoting adoption. Looking ahead, the SIF will work to identify practical ways that insurance supervisors and regulators can support the uptake of the TCFD’s final recommendations. A letter summarizing the response can be found here.
18 January 2017: California Department of Insurance releases results of fossil fuel data call. California Insurance Commissioner Dave Jones announced the results from his Climate Risk Carbon Initiative, which required insurance companies to disclose investments in fossil fuels and requested firms to divest from investments in thermal coal. According to the financial data disclosed, insurers surveyed have US$521 billion in fossil fuel-related securities, which include investments in coal, oil, gas and utilities, US$10.5 billion of which consists of investments in thermal coal enterprises. Since the announcement of Commissioner Jones’ Initiative, insurers have already divested more than US$4 billion in thermal coal and other fossil fuel investments, and have committed to disposing of an additional $881million of coal investments.
1 December 2016: The Sustainable Insurance Forum was launched in San Francisco, California. A full press release detailing the launch can be found here.