Insurers expect climate risk to grow in importance over 3 years

About two-thirds allocate 4% of their portfolios to sustainable assets.

Insurers need stronger support to assess how climate scenarios affect their investments, a global study by Ortec Finance shows.

One in four insurance investment managers said their understanding of climate-related impacts is only “average,” even as over 90% expect climate risk and impact investing to grow in importance over the next three years. 

Nearly a third expect it to become much more important.

Currently, about two-thirds allocate 4% of their portfolios to sustainable assets such as green and social bonds, whilst others allocate between 3% and 5%.

Hamish Bailey, managing director UK and Head of Insurance & Investment at Ortec Finance, said the findings point to a need for a more rigorous approach to climate risk management.