The social and economic changes caused by the COVID-19 pandemic have had a significant impact on our lives over the course of 2020. It has been argued, though, that the changes we have seen over 2020 pale in comparison to the expected impact that climate change will have on our societies and economies. Some predict that we have just 10 years to act on climate change before the damage to the planet is irreversible.
With this in mind, regulators are looking to the financial services industry to better understand the challenges posed by climate risk, including a transition to a low-carbon economy. This briefing note by Milliman’s Sinéad Clarke, Orlaith Lehane and Eóin Stack provides a beginner’s guide to climate risk for Irish insurers. It includes a high-level introduction to climate-related risks and information on what the Central Bank of Ireland and European Insurance and Occupational Pensions Authority are currently doing in relation to climate risk in addition to an overview of the approach taken by regulators in the UK.
Ireland is in the midst of an affordable housing crisis.
Figures published by the Department of Housing, Planning and Local Government
show 6,497 homeless adults in late 2019 with a further 3,778 homeless children.
In total, 1,721 families were in emergency or temporary accommodation including
hotels, bed and breakfasts, hostels, and other temporary accommodation facilities.
In addition, a large number of people are in private rental accommodation,
relying on local authority assistance in paying rent.
A shortage of housing supply seems to be at the crux of the
problem, particularly in the context of increased demand arising from improved
economic conditions and an increased number of large multinational employers. Harnessing
the power of pooled investment funds could help alleviate this crisis while
also potentially providing returns to individual investors.
The proposed pooled investment fund would:
- Build a portfolio of residential properties,
through acquisition and/or development. Initially, it is likely that the focus
of the fund would be on purchasing residential properties, but development of
suitable residential properties would also be possible over time.
- Rent those properties on long-term secure
tenancies with transparent rules around rental increases either to tenants
directly in receipt of the Housing Assistance Payment or directly to local
authorities to supplement the local authority housing stock.
In this paper, Milliman consultants discuss the rationale for a pooled investment fund focused on social and affordable housing.