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Icebreaker One’s Standard for Environment, Risk and Insurance (SERI) team hosted their first legal and governance webinar on May 20th, to explore the most pertinent issues regarding the regulatory environment needed to unlock data sharing to drive towards net-zero in insurance. Join us for SERI’s final legal and governance webinar on June 15, where we will delve in on specific regulatory recommendations

What did we discuss at the first webinar?

Insurers, risk modellers and members of government came together in an hour’s discussion to consider the role that a regulatory framework could play as a requisite for data sharing as well as a catalyst for net-zero in the insurance sector. Naturally, the question regarding what this framework would look like, is more complex.

Topics which were discussed include:

  • How, with a number of environmental regulations and initiatives stemming from regulators such as the PRA, there is mounting pressure on financial institutions to address their climate risk exposures
  • The FCA is looking to Open Finance, an extension of Open Banking, as a means to utilise Open Data and bring new products and services to other financial sectors, such as Insurance.
  • Less has been done in regard to the liabilities on insurers balance sheets in the form of stranded assets. This would be new territory for the FCA, but if the regulator was to focus pressure on insurers moving toward greener targets, this would initiate a sizable shift in the sector. 
  • The insurance sector is known for its competitive nature and it is in the interest of government and regulators to maintain this, much like the CMA with Open Banking. An angle posed to participants was whether insurance players’ competitive position had been impacted enough by climate change to warrant regulatory intervention, however the group focussed on environmental specific regulation, rather than issues of competition. 
  • De-facto regulators are another lever of change with the ability to enforce environmental specific regulation. Rating’s agency S&P, for example, has begun to incorporate Environmental, Social and Governance (ESG) into their rating methodology, with 7 percent of ESG impacting the ratings of insurers. 
  • It is clear that the influence of a regulatory framework as a catalyst for net-zero in insurance is far reaching and could begin to address setting universal standards when it comes to addressing climate change, something that is lacking when it comes to existing regulatory initiatives such as the Task Force on Climate-related Financial Disclosures (TCFD).

What’s next?

Join us for SERI’s final legal and governance webinar on June 15, zeroing in on specific regulatory recommendations and incorporating the SERI teams’ other work streams. We invite you to take part in creating the regulatory environment needed to achieve net-zero in insurance.