Anna Sweeney: Paving the way forward - managing climate risk in the insurance sector

Speech (via webcast) by Ms Anna Sweeney, Executive Director for Insurance Supervision of the Bank of England, at the Moody's Insurance Summit Webinar: The resilience of Insurers in a Changing Climate 9 September 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Introduction

Good morning everyone. I would like to thank Moody's for inviting me to speak on climate change: one of the most significant and urgent risks facing the whole of the economy, today and for decades to come. As such, a major issue across the financial services sector; but given today's audience, I shall concentrate on the insurance side.

With the pandemic, we are living through a systemic risk with major impacts on the real economy and consequently the financial services sector. While it is hoped Covid-19 will eventually run its course - and hopefully sooner if a vaccine is found - the impact and risks from climate change will be felt for decades to come. And although, insurers have demonstrated resilience to Covid-19 - with the sector remaining robust to downside stresses created by the pandemic - the resilience and successful adaption of the industry to the longer term threat of climate change is likely to be a longer challenge. 

Insurance companies play a critical role in supporting businesses manage climate-related risks and provide critical long-term finance, such as infrastructure, that support economic growth. Consequently, the resilience and the ability to manage climate-related risks within the insurance industry is of significant importance.