The Sustainable Insurance Forum (SIF) published two reports providing an overview of how insurance supervisors are integrating climate-related financial risks into supervisory frameworks and regulatory capital requirements, drawing on member surveys and selected case studies. The surveys, conducted in late 2023 and 2024 across 30 and 31 SIF member jurisdictions respectively, found that most supervisors already consider climate-related risks in supervisory activities and that a majority have incorporated climate risks into capital frameworks, although gaps and implementation challenges remain. Respondents reported increasing use of climate scenario analysis and climate stress testing within insurers’ Own Risk and Solvency Assessments (ORSAs) or equivalent processes; physical and transition risks feature most prominently in assessments, while litigation risk has been less frequently considered. Common obstacles to explicitly reflecting climate risk in capital add-on frameworks include limited historical climate data, constraints in internal technical capacity, and the absence of established global methodologies. The reports call for coordinated global efforts to improve climate risk data availability and quality, build supervisory expertise and institutional capacity, expand the use of climate scenarios and stress-testing tools, and support prudent, evidence-based adjustments to regulatory capital frameworks.

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