To what degree? A climate scenario analysis of U.S. insurers’ portfolios (BlackRock)

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by Ashley Schulten, Managing Director, Head of Responsible Investing for Global Fixed Income, Laura Segafredo Vice President, Responsible Investing Group in Global Fixed Income, and Ashwin Joshi, CFA Associate, Global Fixed Income Responsible Investing

Insurers are uniquely exposed to climate-change-related risks from multiple angles, both in their underwriting and investing activities. BlackRock has performed a climate scenario analysis on US insurers’ portfolios in order to help investors understand climate risks and adapt investment strategies to manage them.

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To what degree?

The implications of climate change are playing out across two broad channels: physical and transition related. Physical risks of climate change manifest in the form of rising sea levels, droughts, wildfires and storms, as discussed in BlackRock’s Getting physical. Transition risks (and opportunities) play out along technological, regulatory and social channels. Insurance companies are exposed to both these types of climate-risks.

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