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Climate Change and Insurance: The Evolving Role of Scenario Modelling

Sanjiv Sharma
Head of Actuarial & Exposure Management

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Climate change is a major emerging risk affecting insurers' balance sheets, necessitating integration into their modelling. 
Our latest article explores how scenario modelling can help insurers address the impacts of climate change. It emphasises integrating physical and transition risks into capital models, shifting from qualitative to quantitative assessments. The article also discusses methodologies for short-term impacts from long-term scenarios and the importance of understanding uncertainties in climate modelling to manage financial risks effectively.
We thank Moody’s for their insights. For further information, please contact Niall Ledgard.

For more on climate change modelling for actuarial and exposure management, contact Sanjiv Sharma.

For information about the LMA's Climate Risk Working Group, reach out to Alex Koukoudis.