Results of the 2023 ACPR Climate Stress Tests
Abstract
The challenges related to Climate Change are considerable for the financial sector which must cope with a significant increase in financial risks linked to global warming, and play a determinant role in the transition to a low-carbon economy.
In this context, the French Prudential Supervision Authority (ACPR) has conducted a first pilot climate stress test in 2020-2021, which concluded that French banks and insurance companies have a “moderate” exposure to risks linked to climate change.
The ACPR conducted a second climate exercise in 2023, by restricting its scope to the insurance sector. This exercise, covering 90% of the French insurance balance sheet, had explored new dimensions in climate risk assessments by studying the impact of extreme but plausible hypothesis over the short and long term.
Download this article to learn about :
- A description of the scenarios developed by the ACPR as part of these new climate stress tests
- The impact of climate risks on insurers' solvency in the short term
- The impact of climate transition risk on insurance companies' investment portfolios, over the short and long term
- The impact of natural catastrophes on insurers’ technical results
- The lessons learned and limitations resulting from this study
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