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Regulation

The insurance industry has an array of data and expertise that can help it to uniquely understand climate risk. It can therefore play an important role in supporting the broader financial sector to fully understand, and respond to the physical, transition and liability risks associated with climate change. The objective is to identify how changes to the regulatory environment can empower insurance to support the transition to a zero carbon, climate-resilient economy more broadly across financial markets.

This regulatory research pillar is directly informed by the Insurance Advisory Council. The Council’s objective is to help strengthen insurance industry support for regulators, policymakers and other stakeholders as they consider how to promote more systematic responses to climate change across the financial system.

 

Policy engagement

Member-led research exploring the potential role of insurance underwriting in mitigating physical and transition risks to be published as a short white paper. The paper will outline industry skill set and how it can be deployed to build climate change resilience and achieving global targets with examples from renewable energy, sustainable products and data sharing. It also presents broad policy recommendations that would help the industry to fulfil its role to full potential.


Insurance regulation and policy for COP26

Research Led by CISL Fellow Dr Ana Gonzalez to show how insurance systems can influence and accelerate the urgent global transition to a low-carbon, climate-resilient economy. Based on historical and current examples, this report will paint a forward-looking picture highlighting the complementarity of climate policy and insurance regulation to shape, steer and enable the transitions ahead.

The report will map the complex insurance ecosystem of policy, regulatory and industry institutions, governance mechanisms and initiatives that operate across the climate reform landscape. Finally the report will also provide a set of strategic recommendations for CoP26 related objectives: regulatory reforms and wider interventions to optimise the contribution of insurance systems by countries, regions and sectors in the transition to the low-carbon, resilient economy for the climate decade and beyond.


Insurance Regulation report

Insurance regulation for sustainable development (2015)

This study assesses the role insurance regulation should play in protecting the basic human rights of life, livelihood and shelter against natural hazards and climate risk. It found that effective insurance regulation greatly facilitates improved access to both traditional and alternative insurance cover. This, in turn, helps to increase the resilience of communities, fulfil the human rights objectives of both state and non-state actors and contributes to realising the UN Sustainable Development Goals more broadly.

Insurance regulation for sustainable development (2015)

 

 


Building resilience in underinsured markets

Building Resilience Developing CountriesThis study surveyed existing insurance schemes across the developing world and highlighted how the focus of the industry remained on risk transfer, rather than risk reduction. Analysis indicated that incorporating risk reduction into insurance schemes, even if there is not direct causality, can create better outcomes for economic development and the commercial viability of insurance.

Building resilience in underinsured markets

Global insurance statement on adapting to climate change in developing countries