Climate change & climate risk related news

In a perhaps surprising turn of events, the opening hours of the COP28 climate talks today have seen a landmark agreement to operationalise and provide initial funding for the much-discussed loss and damage fund, that is designed to help the countries that are most vulnerable to the adverse effects of climate change.

With the COP28 climate talks beginning this week, Moody’s Investors Service has taken a look at the climate and environmental exposure inherent within rated global debt issuance, finding that the total has doubled since 2015 when the Paris Agreement climate change accord was signed.

Parameter Climate, the parametric climate risk transfer focused underwriter and advisor, has completed a management buyout of seed investor SiriusPoint, as the latter continues to reduce its equity ownership in program and MGA businesses.

Underscoring the potential impacts of climate change on the insurance-linked securities (ILS) market, analysts at global asset management group Schroders have suggested the effects “should be marginal” given climate change is gradual and long-term in nature, while ILS instruments typically have a term of one to three years.

Howden, the global insurance and reinsurance broking and underwriting group, has launched a new Howden Climate Parametrics unit, to bring together its parametric risk transfer, climate risk and resilience, capital markets and insurance-linked securities (ILS) expertise, to deliver responsive risk transfer solutions.

Investor interest in insurance-linked securities (ILS), particularly on the private ILS and reinsurance side of the market, can be enhanced with a continuation of the prudent approach to underwriting currently being seen, Marcel Grandi, Head of ILS Sourcing at Twelve Capital told us.

The market for catastrophe risks could double by 2040, with continued growth expected over the coming years, according to SCOR CEO Thierry Léger, but he also cautioned that the industry must work to address the current insurability challenge, especially in relation to climate change.

The global reinsurance sector highlights climate change as the top risk facing their businesses, a new survey from PwC shows, highlighting the need for the industry to innovate on solutions for this exposure.

Creating deeper catastrophe bond markets could help in tackling the climate insurance protection gap in Europe, according to the European Central Bank’s (ECB) Margherita Giuzio.

Re2, a climate risk transfer specialist located in Bermuda operated by alumni of ILS manager Nephila Capital, has announced the completion of a first of its kind Battery Revenue Swap for a Blackrock fund portfolio energy company.