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Analysis of U.S. Insurance Industry Climate Risk Financial Disclosures for Reporting Year 2021

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October 2023

Authors

Patrick Wiese, ASA
R. Dale Hall, FSA, MAAA, CERA, CFA
Jennifer Gardner, CPCU, AIDA
Jeff Czajkowski, PhD

Description

This report presents an analysis of the NAIC climate risk disclosures for reporting year 2021. The 2021 disclosures were the most recently available data at the time this analysis was conducted (in June and July of 2023).

The broad goals of the analysis are to summarize insurers’ efforts thus far to govern and manage risks related to climate change, as described in the 2021 disclosures, and to examine how disclosures vary both across and within lines-of-business. This analysis consists of three components: (1) a high-level qualitative scan to develop a general sense of disclosures’ strengths and weaknesses, (2) a basic analysis that evaluates each insurer’s climate risk awareness and their progress in developing the technical capabilities needed to assess climate risks, and (3) a granular analysis that assesses each disclosure against features of the TCFD’s reporting framework. The first two of these analyses were performed by the Society of Actuaries (SOA) Research Institute, and the third analysis was performed by the National Association of Insurance Commissioners (NAIC). The SOA and the NAIC reviewed each other’s analyses and worked together to develop the report.

Materials

Analysis of Climate Risk Financial Disclosures for Reporting Year 2021

Tableau Visualizations

Distributions of climate risk disclosures, firms, premiums and net assets by number of characters of text in disclosure

Market concentration of insurers that filed climate risk disclosures in 2021

Results of the basic analysis

Acknowledgments

The researchers’ deepest gratitude goes to those without whose efforts this project could not have come to fruition: the Project Oversight Group for their diligent work overseeing, reviewing, and editing this report for accuracy and relevance.

Project Oversight Group members:
Hannah Clouser, FSA, CERA
Dave Evans, FCAS, MAAA
Eric C. Lowe, Chief – Data Analytics & Cyber Initiatives Strategy, Data, and Cyber Division, Virginia Bureau of Insurance
Mike Peterson, Deputy Commissioner for Climate & Sustainability, California Department of Insurance
Kara Voss, Ph.D., Climate Finance Specialist, California Department of Insurance
Lori Wing-Heier, Director, Alaska Division of Insurance
Scott White, Commissioner, Virginia State Corporation Commission’s Bureau of Insurance
Barbara Zonneveld, FCCA

At the Society of Actuaries Research Institute
Rob Montgomery, ASA, Research Project Manager

The SOA Research Institute would like to acknowledge The Center for Insurance Policy and Research for their generous support and expertise helping to best fulfill the research objectives of the project.
Patrick Cho
Libby Crews, CPCU
Kelly Edmiston, Ph.D
Shaveta Gupta, CPCU, ARM, Are, CCM, CCRMP
Brenda Rourke, Ph.D
Boheng Su

Questions or Comments?

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If you have comments or questions, please send an email to research@soa.org.