Tag Archives: Amy Nicholson

Overview of Climate Financial Risk Forum guide

In March, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) hosted the first meeting of the jointly established Climate Financial Risk Forum (CFRF). The CFRF was established to build capacity and share best practice across financial regulators and the industry to advance financial sector responses to the financial risks from climate change.

The CFRF produced a guide to help firms understand the risks that arise from climate change and to provide support on how to integrate these risks into strategy and decision-making processes. The CFRF emphasises the importance of greater transparency and consistency regarding firms’ disclosures of climate-related financial risks, the benefits of effective risk management and scenario analysis and the opportunities for innovation in the interest of consumers.

The forum set up four working groups to explore the risks that climate change poses in each of these areas and developed practical guidance. In this paper, Milliman’s Amy Nicholson and Sophie Smyth summarise the key guidance from each of these four working groups.

PRA stress test considerations for UK life insurers

In June, the Prudential Regulation Authority (PRA) published its feedback to general and life insurers following their participation in the Insurance Stress Test (IST) 2019 exercise and the more recent stress test exercise specific to COVID-19.

IST 2019 was the third IST conducted by the PRA since the introduction of Solvency II. However, IST 2019 was the first in which UK life insurers participated (the first two tests being restricted to general insurers) and only life insurers with significant annuity exposures were invited to participate.

This paper by Milliman professionals summarises the key feedback from the PRA and discusses the expected implications for life insurers in the United Kingdom over the course of 2020 and beyond.