The Central Bank of Ireland (CBI) has now (3 August 2022) published its anticipated Consultation Paper on proposed Guidance for (Re)Insurance Undertakings on Climate Change Risk (the Guidance).

The CBI acknowledges the appetite in the (re)insurance sector to act in relation to climate change risk. However, its 2021 survey highlighted (re)insurer uncertainty as to how to proceed. The survey results published in May 2021 found that only 20% of (re)insurers who responded fully integrate climate change risk in their risk management framework: – with under half conducting scenario analysis / stress testing.

The proposed Guidance seeks to assist preparations and continuing work by (re)insurers to address this risk.

CBI expectations - proposed Guidance

Key focal areas / expectations include:

  • Governance – ensuring appropriate governance frameworks to address climate change risk (including clearly defined roles and responsibilities)
  • Materiality assessments – undertaking materiality assessments to identity exposure to climate change risk
  • Scenario analysis / Own Risk and Solvency Assessment (ORSA) – assessing impact of climate change risk through appropriate analysis
  • Strategy and business model – considering climate change risks in the strategic decision making process; and integration into business models
  • Risk appetite statements – inclusion of specific climate change risks, exposure limits, thresholds and financial considerations
  • Business as usual activities (BAU) – considering and incorporating climate change risk in BAU activities (e.g. risk management, underwriting, pricing, reserving, capital and investment decisions)

Throughout its proposed Guidance, the CBI mentions proportionality in approach (taking into account the nature, scale and complexity of the (re)insurer).

The CBI also refers to challenges for (re)insurers, e.g. available data; recognising that there will be a period of evolution within which (re)insurers should build capacity and gain experience/expertise in this space.


The CBI has produced a helpful visual aid to illustrate how it expects climate change risk action to be embedded by (re)insurers.

Next Steps

In addition to general feedback, the CBI seeks input on three specific issues:

  • any further clarity desired on materiality assessment and scenario analysis
  • clarifications on any other aspects of the Guidance, or terms used (including the infographic)
  • whether there are additional items that stakeholders would like to see addressed in the Guidance

Submissions are invited on the proposed Guidance by 26 October 2022.