The feedback provided a consensus that both the guidance and methodology included in the framework are valuable, and useful in the assessment of physical climate change risk for the general insurance industry. The case studies provided were seen as being very helpful in guiding firms through the different steps identified by the framework, and facilitating progress that is already visible since the publication of the report.
On the research element of the framework, there were concerns raised on the ability of firms to analyse and interpret scientific literature themselves, especially given the different views represented in different studies. This particularly seemed to be the case for smaller firms with limited resource available for these activities.
Feedback also suggests an appetite for a similar framework on the assessment of risk on the asset side of the balance sheet. It was raised that the catastrophe modelling practice, which is widely used in the insurance industry, as well as other approaches that have been developed and are coming into common practice, could be applicable for assessing the financial impacts of physical climate change risk in other contexts. An example could be the asset and investment side of insurers’ balance sheet and/or for other types of financial firms.
Other feedback received includes:
(i) a need for guidance to help assess the current model calibrations and whether these accurately represent climate change to date;
(ii) the value in having a more streamlined expert judgement method for the expert to use when assessing impacts from physical climate change; and
(iii) recognition that impacts from physical climate change include opportunities as well as risks.