(Reuters) – Insurance companies could face European climate stress tests as soon as 2023, the head of the EU Insurance Regulatory Authority said on Thursday at the Reuters Future of Insurance Europe conference.
The insurance industry is exposed to both climate change risks. through its fossil fuel insurance and through the investment portfolios of individual insurance companies.
Petra Hielkema, chair of the European Insurance and Occupational Pensions Authority, said that although the tests will take place by 2024, "we may want to do this faster."
But Hielkema, who spoke in a panel on climate change, said that there was "no concrete planning" for 2023 tests yet.
Ms Hielkema said that stress tests for pension funds next year will also focus on climate change.
Anna Sweeney, Bank of England's CEO for insurance, said that the central bank was conducting its first climate stress tests for banks and insurance companies, with results calculated in the first quarter of 2022.
"We have had to ask for resubmissions from some companies where we have felt that it has not There was enough due diligence … or enough clarity, "she told the panel.
Ms Hielkema and Ms Sweeney both said their test would not focus on chap. italkrav. Hielkema said the use of a carbon tax was a better way to encourage companies to tackle climate change risks than to introduce capital requirements.
Alison Martin, EMEA CEO of Zurich Insurance, also told the panel that a carbon price was needed. as part of a set of mechanisms to help us reach the transition. ”
“ We have almost 70 different versions of carbon dioxide pricing mechanisms. There is a challenge to come up with something that is harmonized, "said Martin.
One of the toughest tasks will be to synchronize global rules around these markets, as well as to agree on a global price for coal.
Marie Niemczyk, Head of Insurance Relations at the investment firm Candriam, told the panel that a carbon price would be a very useful tool for investing, but "it must be high enough to actually have a deterrent effect."