Policy shift risks transforming US health insurers; global insurers gird for climate risk

Original publish date: October 21, 2020Inside this episode:Simon Ainsworth and James Eck of the Insurance team discuss the latest developments in global insurers’ efforts to assess and manage climate risk. ​​​​​(begins at 2:27)​​Stefan Kahandaliyanage of the Insurance team lays out the risks US health insurers face from a policy drive toward a public insurance option. (begins at 10:04)Related content:Health Insurance – US: Policy drive toward transformation of health insurance poses risks to profitability - Proposals to create a public health insurance option would likely reduce earnings at our rated companies to varying degrees, with more expansive options having a larger impact.P&C Insurance and Reinsurance – Global: Climate change risks outweigh opportunities for P&C (re)insurers - P&C (re)insurers have significant exposure to the economic consequences of climate change, including risks arising from catastrophe exposures, claims on liability policies, and investmentInsurance – Europe: Insurers increasingly engaged as ESG risks and opportunities come into focus - European insurers see environmental, social and governance (ESG) issues as an area of strategic focus, and expect them to have a moderately adverse impact on underwriting risk.Financial Institutions – Europe: BoE climate change stress tests will reinforce risk management for banks and insurers - Climate change stress tests are credit positive as they will help banks and insurers understand the consequences of climate change for their business, and support their risk management.Allianz, AXA, Swiss Re, Munich Re, Zurich: Retreat from coal reduces liability and stranded asset risk, a credit positive  - Major European (re)insurers are limiting their investment and underwriting exposure to coal. This protects them against climate change liability risk, and the risk of asset stranding.Moody’s Banking Series - ​​The Series digital program is free and offers exclusive interviews, thematic panel discussions and regional deep dives.​