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

Asset class/economic sector
Orderly transition
Disorderly transition
Too little, too late
Equity
Agriculture
9.2%
18.4%
33.4%
Energy intensive
10.3%
20.7%
40.7%
Fossil fuel
24.6%
49.3%
69.3%
Housing
2.2%
4.3%
34.3%
Transport
5.1%
10.2%
20.2%
Utilities
20.9%
41.8%
61.8%
Other
0.0%
0.0%
10.0%
Corporate bonds, and loans and mortgages
Agriculture
1.4%
2.8%
5.0%
Energy intensive
1.6%
3.1%
6.1%
Fossil fuel
3.7%
7.4%
10.4%
Housing
0.3%
0.6%
5.1%
Transport
0.8%
1.5%
3.0%
Utilities
3.1%
6.3%
9.3%
Other
0.0%
0.0%
1.5%
Sovereign bonds*
0.1-2.8%
0.1-3.6%
0.3-7.3%
Real estate*
0.1-2.8%
0.3-4.9%
3.4-34%
Other (assets out of scope)
0.0%
0.0%
0.0%
Table 3:
Stress factors
* The applied stress factor differs per country (see explanations above).

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36
more sophisticated scenario analysis would be 
needed to fully assess the feedback loops between 
climate impact, the financial system and the real 
economy. For this exercise, the IAIS chose to limit 
the complexity of the analysis to reflect the current 
maturity of available tools and data at the global 
insurance sector level.
4.2.2 Outcomes 
Focusing first on equities, corporate bonds, and 
loans and mortgages, Graph 15 reports the impact 
by climate-relevant sector for the total sample and 
by region. For example, for the equity portfolio 
of the total sample, it shows that the total losses 
range between 3% and 18% of the pre-stress 
value of equities, depending on the severity of the 
scenario. Also, energy-intensive assets appear 
to be the predominant sector contributing to the 
overall shock suffered by insurers in the transition 
scenarios, whereas the housing sector contributes