Focus on climate risks: We help you prepare for ORSA reporting

Sustainability and climate change are the current focus of insurance-specific regulations. The guidelines also take into account opinions issued by the European Insurance and Occupational Pensions Authority (EIOPA) in April 2021. These opinions require that insurance companies analyse their climate risks and disclose the results in an Own Risk and Solvency Assessment (ORSA) report. Our experts will help you accomplish this.

To learn more about our services relating to climate risk analyses for companies in the fields of production, consumption, and services, see here.

To accurately identify the environmental threats facing your insurance company, you need an analysis of the risks posed by climate change. Regulatory compliance is, however, not the only reason to conduct this analysis: Identifying climate change risks is now a key component of risk management’s responsibilities along with the traditional risk categories, in particular: market, credit, technical, and operational risks.

Climate change therefore has the potential to affect an insurance company’s entire value chain. Changes in policy, regulation, and the market itself – driven by climate change – can also affect the value of insurers' investments. At the same time, the economic effects of climate change – especially in the form of property damage caused by natural hazards – result in higher claim expenditures. While the steady increase in expected losses can be offset through premium adjustments, the greatest risk comes from the more unpredictable fluctuations in loss levels, as these cannot be predicted solely based on historical loss trends.

Our approach to ORSA reporting

To quantify the climate change risks for your company, we have developed a methodology that integrates seamlessly into your overall risk management and existing ORSA process. Our experts adapt this to your company’s individual risk management processes and tools.

Our project approach includes collaborative business meetings and workshops in which we not only contribute our expertise in analysing climate change risks but also, very importantly, communicate it to your employees. In doing so, we support you effectively in the ongoing sustainable development of your risk management approach.

Our solution for ORSA reporting

The risk analysis methodology employed by our team of experts is based on current regulatory and scientific findings and (publicly) available data. We take a step-by-step approach to analysing your environmental threats by:

  • Identifying your climate change risks within the context of traditional risk categories
  • Assessing the materiality of the identified risks in the pre-assessment phase
  • Conducting scenario analyses in three different timeframes (short, medium, and long term) as per the climate scenarios provided in the guidelines developed by the Network for Greening the Financial System (NGFS)
  • Evaluating the analytical results and considering the impact of existing and planned risk mitigation schemes, such as the reinsurance programme
  • Summarising the results and supplementing the climate change risk reporting contained in the ORSA report

Our team of industry, ESG, and actuarial experts also supports you with broad expertise in all areas of sustainability reporting. This enables you to identify overlaps in regulatory data points and use these efficiently.

Your advantage

In addition to ensuring regulatory compliance, you also have the ability to carefully monitor your climate change risks – and can incorporate these into your corporate risk management scheme. We look forward to using our industry-specific sustainability expertise and our sophisticated risk methodology to benefit your business.

Just contact us.