Says the FT (Oct 27, 2014 : The Bank of England has written to insurance companies to assess the risk climate change poses to their solvency and earnings. FT environment correspondent Pilita Clark and City editor Jonathan Guthrie discuss the move and regulators’ concern about global warming). Alas its a video, but worth listening to. Apparently there’s a letter from the BoE to various insurance companies, but its moderately stealthed – not on the BoE website says the video, and my attempts to search for it.
Summary: they’ve written to 30 insurers, asking them how prepared they are for Climate Change. Is it just a friendly little letter seeking to “deepen a shared understanding”? Some Qs are pro-forma, some (about 15) rather more detailed: have you considered the threshold of potentially serious extreme weather events that would start to impact the viability and solvency of your business? And then at the end “what do you consider the role of regulation”? Does this mean, do they want insurers to have to put up more capital? Not something they are looking at “at the moment” they say. Then a brief segment in which the interviewer probes the connection between GW and extreme weather. And what part of catastrophes need to be covered by The State preventing them in the first place, and what by insurers paying for cleanup?
I’m no great fan of regulation. Ensuring that your insurers remain solvent is plausibly part of the regulators job, though.