European insurers in favour of EU’s sustainability agenda – Insurance Europe

Written by Michael Griffiths

21/12/2022

European insurers are in support of the EU’s sustainability agenda, Insurance Europe has stated, after the group published its views on the integration of sustainability risks in Solvency II.

Insurance Europe said that insurers are committed to continue to contribute, and to build upon their current actions, towards the transition to a more sustainable society and to play their role in achieving the targets of the EU Green Deal.

Sustainability is a key element of the Solvency II review and Insurance Europe suggested that insurers are supportive of the changes that can help clarify how sustainability risks, including climate change risks, are appropriately integrated into the Solvency II framework.

Although requirements for insurers to integrate sustainability risks into their investment, underwriting and reserving are already a part of Solvency II, the industry is acknowledging the benefit of adding some further clarifications.

In terms of the EU’s risk-based proposals, Insurance Europe is in support of regular reviews, and updates where necessary, of the scope and calibration of standard formula parameters pertaining to climate-related natural catastrophe risk.

The group also said it supports the inclusion of climate change scenario analysis in the ORSA, as well as EIOPA’s mandate to investigate whether a differential prudential treatment for green or brown assets, as well as assets with a social objective, is justified based on evidence of risk differentials.

“The industry supports transition plans, which a very wide range of companies, including insurers, will need to set up and disclose, as currently being foreseen in the cross-sectoral directives of the Directive on Corporate Sustainability Due Diligence and the Corporate Sustainability Reporting Directive,” Insurance Europe stated.

“Therefore, to avoid unnecessary duplication and inconsistencies, there is no need to include transition plans in sector specific legislation, such as Solvency II.”

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