Increasing Regulation On Climate Change

In 2021, the increasing effects of climate change and the response from U.S. insurance regulators will create both challenges and opportunities for insurers.

U.S. insurance regulators will increase scrutiny of insurers’ disclosures regarding efforts to manage potential climate change risks.

Such risks range from unprecedented losses from climate-related natural disasters to concerns about hits to insurers’ investments in certain asset classes (such as fossil fuels as the shift to alternate energy sources proceeds in coming years).

In 2021, U.S. insurance regulators will continue undertaking various actions designed to encourage insurers’ climate change risk management.

At the same time, U.S. regulators will likely increase their demands on insurers to accommodate the needs of insureds who are already being hurt by climate change.