Climate Risk Management in the U.S. Insurance Sector: An analysis of climate risk disclosures

This report is the first systematic review of U.S. insurance companies’ climate risk strategies, yielding new insights that risk managers and regulators can use to maintain a sustainable insurance sector. This report from Ceres and the California Department of Insurance, the largest U.S. state insurance regulator, reviews over 400 responses from insurance companies to the National Association of Insurance Commissioners’ 2021 Climate Risk Disclosure Survey. The survey, designed to help regulators gain a window into how insurers manage climate-related risks, was aligned with the Task Force on Climate-related Financial Disclosures (TCFD) framework for the first time in 2021. In 2022, fifteen U.S. state insurance regulators implemented Climate Risk Disclosure Survey, receiving responses from more than 1,500 companies representing over 80% of the U.S. insurance market. The goal of this analysis, which used two independent methods to review the responses, is to provide insights that may be helpful for other insurers in developing their climate-related disclosures and to encourage improvement in the comprehensiveness of those disclosures. The analysis shows that insurance company responses to the Climate Risk Disclosure Survey demonstrate diverse, and sometimes sophisticated, approaches to climate risk management.