Some industry comment on the recent BOE CBES statement, which can be found here.
Charlotte Clark, ABI Director of Regulation said: “We welcome the publication of the Bank of England’s results from its flagship Climate Biennial Exploratory Scenario (CBES) exercise, which participating insurers have invested significant time and resource into.
“The CBES results underscore the need for regulators, government, and financial services to work together with all sectors of the real economy to ensure that credible, realistic and governable transition plans are set out to underpin a UK-wide transition to a net-zero economy. These results demonstrate that failing to take action will be disastrous for the economy and ultimately consumers.
“Our members are committed to learning from the CBES results, and to building on the significant progress made in the past few years on their climate risk management capabilities and developing long-term transition plans. To unlock the industry’s full green investment capacity the Government must take an ambitious approach, including regulatory reform to the Solvency II regime
“Alongside this investment we continue to call on Government to invest in protecting society from the effects of climate change, specifically to invest in building and maintaining flood defences, and the exercise underlines how crucial that will be.”
John Berry, chief risk officer at Allianz Holdings:
“We support the CBES exercise, which has sought to deliver a more holistic view of the financial risks of climate change to insurers and banks.
At a global level, Allianz is committed to environmental goals as part of the Net-Zero Asset Owner Alliance (NZAOA) and the Net-Zero Insurance Alliance (NZIA). Just last month, we accelerated our global climate strategy and we will now target net-zero operations by 2030 instead of 2050. In the UK, we will intensify our ongoing efforts to make our operations and supply chain ever more eco-friendly, to enable the green transition and to support our customers in living and working more sustainably.”
Here is an article by Catherine Dixon, chief underwriting officer at Allianz Commercial, which looks at the climate related challenges being addressed bny Allianz;
CLYDE & CO
Wynne Lawrence, Legal Director, Clyde & Co. comments:
“The Bank of England’s assessment is that insurers still need to do much more to understand and manage their exposure to climate risks. The findings will help the UK’s financial regulators shape future regulation. Other jurisdictions are looking to the UK’s leadership in this space, so the results should also be of interest internationally to corporates and their advisors working on climate risk management.
“The CBES exercise has highlighted how important it is for insurers and banks to move in lockstep with their counterparties across the economy in transitioning to net zero. That is going to require concerted and predictable policy action that is clearly communicated and disclosure of clear metrics and standards of green and climate-resilient products and investments.”
Nigel Brook, Partner, Clyde & Co. comments:
“The Bank is actively considering the use of capital requirements to address climate-related financial risk faced by insurers and banks. Particularly in light of the Bank’s feedback on the results of this first CBES, assessing climate risk is now a priority for UK insurers.”