Insuring the climate transition: Enhancing the insurance industry’s assessment of climate change futures - The overall aim of this pilot project is to contribute to the development of consistent and transparent analytical approaches that can be used to identify, assess and disclose climate change-related risks and opportunities in insurance underwriting portfolios.

Insuring the climate transition: enhancing the insurance industry’s assessment of climate change futures

Creator: PSI-TCFD
Type of methodology: Methodological recommendations
Approach type: CVRA (Climate Vulnerability and Risk Assessment)
Short description: The report proposes an approach for “physical ris scenario analysis” comprising six steps and including definition of impact pathways and modelling approaches
URL to access information about the tool: https://www.unepfi.org/psi/wp-content/uploads/2021/01/PSI-TCFD-final-report.pdf
Hazards covered: Others
Audiences: Financial institutions
Assessment level: Asset-level
Evaluation system:

N/A

Strengths:

Clear definition of steps and concepts for scenario analysis

Limits:
  • Not specific to buildings
  • Does not describe steps of a specific - methodology
  • Based on modelling

The report proposes an approach for “physical ris scenario analysis”, comprised of six steps:

  • Step 1: Define scope of analysis;
  • Step 2: Define impact pathways;
  • Step 3: Obtain climate data;
  • Step 4: Develop modelling approach;
  • Step 5: Construct a model;
  • Step 6: Test the model.