PRA postpones climate and insurance stress tests due to COVID-19 pressures

Written by Adam Cadle

07/05/2020

The PRA has postponed the launch of its climate and insurance stress tests due to current pressures on insurance firms due to COVID-19.

The climate change stress test launch has been postponed until at least mid-2021.

“This delay reflects a desire to maintain the ambitious scope of the exercise, whilst giving firms enough time to invest sufficiently in their capabilities to allow then to deliver to a high standard,” the PRA stated.

The PRA said this summer it will however issue follow-on guidance on its 2019 Supervisory Statement on enhancing firms’ approaches to managing the financial risks from climate change. In addition, the outputs from the Climate Financial Risk Forum (an industry group set up in 2019 to bring together leading practice across the financial sector, and chaired jointly by the PRA and FCA) will be published in the summer.

The regulator said it will not be publishing results of last year’s Insurance Stress Test and will postpone the next Insurance Stress Test to 2022, with a view to seeking feedback from firms on the proposed design during Q4 2021.

Full supervisory engagement on Libor will be resumed from 1 June 2020, including data reporting at the end of Q2.

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