The report sets out a stark picture of rising flood, heat and infrastructure risks across the UK, concluding that climate change is already imposing material costs on households, businesses and the financial system, with impacts expected to intensify without a step-change in adaptation.
For insurers, the findings closely reinforce the Prudential Regulation Authority’s updated supervisory expectations under SS5/25, underlining that climate risk is no longer a long-term or theoretical issue, but a current and financially material risk requiring stronger governance, scenario analysis and decision-useful risk management.
The CCC highlights the interconnected nature of climate impacts, spanning property damage, infrastructure disruption, supply chains, labour productivity and life & health, pointing to the need for insurers to move beyond single-hazard assessments and adopt more system-wide views of risk. While the report focuses on the UK, it also notes that similar adaptation gaps and physical risk pressures apply globally, with implications for insurers writing international business.
Cormac Bradley, Senior Actuarial Director at Broadstone commented: “This report marks an important shift from climate risk awareness to climate risk readiness. As Parliament’s independent climate advisers, the CCC is clear that climate impacts are already affecting the economy and financial system. For insurers, this provides a strong evidence base to identify what is genuinely material and to strengthen climate risk frameworks in line with the PRA’s SS5/25 expectations. The message is no longer about future risk, it is about how firms are managing climate risk today.”
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