Gimar special topic edition the impact of climate change on the financial stability of the insurance sector

Graph 7:
Top 10 real estate weighted ND-GAIN vulnerability index
Source: ND-GAIN and IAIS data collections

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26
2.5 
3.6 
3.6 
4.3 
3.5 
5.6 
-
1.0
2.0
3.0
4.0
5.0
6.0
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Transition risk - now
Physical risk -
now
Transition risk - 10
years
Physical risk - 10
years
Transition risk -
beyond
Physical risk -
beyond
E
xpo
sure (
0-
9 p
oi
nts
): 
im
pa
ct (0
-3) 
x probab
ilit
y 
(0
-3)
Not a concern
Low probability, low impact
Low probability, medium impact
Low probability, high impact
Medium probability, low impact
Medium probability, medium impact
Medium probability, high impact
High probability, low impact
High probability, medium impact
High probability, high impact
Not possible to estimate
Exposure (Impact x Probability)
Graph 8:
Supervisory probability and impact assessment: transition and physical risks
In terms of transition risks, more than 80% of 
Members that respondend with an estimate 
expect at least a medium probability, and around 
50% expect at least a medium impact 10 years 
from now. For physical risks, 95% of Members 
that were able to provide an estimate expect 
at least a medium probability, and around 75% 
expect at least a medium impact 10 years from 
now. Members also highlighted high levels of 
uncertainty, with more than half of the respondents 
indicating that it is not possible to estimate the 
probability and impact of the risk for the more 
distant future (>10 years). 
Members were also asked about developments 
in historical trends and their expectation of future 
trends in investment holdings of climate-relevant 
assets, based on information available at the 
supervisory level. Overall, no clear global trend 
is visible when looking back at recent years. 
When asked about future trends, the majority 
of respondents could not provide a reliable 
estimate. When estimation was possible, around 
75% of Members expected stable or decreasing 
insurance investment holdings in most climate-
related sectors.
WHEN ASKED ABOUT 
THEIR SUPERVISORY 
ASSESSMENT OF THE 
RELEVANCE OF TRANSITION 
AND PHYSICAL RISKS (IN 
TERMS OF PROBABILITY 
AND IMPACT OF THE RISK), 
MEMBERS REFERRED TO A 
SIGNIFICANT RISK THAT IS 
INCREASING OVER TIME.
Source: IAIS data collection

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27
0%
20%
40%
60%
80%
100%
Agriculture
Energy intensive
Fossil fuel
Housing
Transport
Utilities
Three-year historical trend
Strongly increased (>20%)
Increased
Remained stable
Decreased
Strongly decreased (>20%)
Not possible to estimate at this point