Global unveiling of pioneering transition strategy blueprint for insurance underwriting ventures at the United Nations forum
The United Nations-convened Forum for Insurance Transition to Net Zero (FIT) has launched a groundbreaking guide, titled "Underwriting the Transition," aimed at helping insurers, reinsurers, and brokers develop and disclose credible transition plans for their underwriting portfolios.
The guide, which is the second deliverable of the FIT Transition Plan Project, identifies key elements of a credible transition plan and provides a checklist to assess its credibility. The central components include a clear vision and ambition, materiality and portfolio coverage, timeframes and interim targets, transition strategy and steps, governance and accountability, risk management integration, transparency and disclosure, and stakeholder engagement.
The launch of the guide comes as the Forum, chaired by the United Nations Environment Programme (UNEP) and currently comprising over 50 organisations from across the globe, prepares for its final deliverable. Scheduled to be launched at the 2025 UN Climate Conference (COP30) in Belém, Brazil this November, the third and final deliverable will produce holistic, "total balance sheet" transition plan guidance that links the underwriting and investment portfolios of insurance and reinsurance companies.
Jean-Michel Beacco, CEO of Institut Louis Bachelier, is pleased to contribute to filling the gap by advancing rigorous, science-based approaches tailored to the realities of the insurance sector. Guillaume Oreckin, Deputy CEO of Crédit Agricole Assurances, emphasises the importance of insurers participating in the common effort to move towards a less carbon-intensive economy. Petra Hielkema, Chairperson of European Insurance & Occupational Pensions Authority (EIOPA), believes that transition plans are an important tool to ensure long-term financial sustainability and support the prudential assessment of sustainability risks.
Steven Rothstein, Managing Director of Ceres Accelerator for Sustainable Capital Markets, applauds the FIT's collaborative approach and industry-wide standards. Dave Jones, former California Insurance Commissioner, encourages insurers to undertake transition plans for both the investment and underwriting sides of their business.
The "House of Insurance" at COP30, built by CNseg, will serve as the main platform for climate ambition and action by the global insurance industry. The guide, therefore, comes at a crucial time as the industry prepares to showcase its commitment to the fight against climate change.
In summary, a credible transition plan, as outlined by the UN FIT, is one that is comprehensive, measurable, governed, transparent, and strategically integrated into the insurer’s core underwriting approach to drive real-world emission reductions and support the broader transition to net-zero. The guide aims to help insurance market participants navigate a complex and evolving landscape of sustainability disclosure and reporting, paving the way for a more sustainable and resilient insurance sector.
[1] Source: UN-convened Forum for Insurance Transition to Net Zero (FIT) [2] Source: "Underwriting the Transition" guide by the UN-convened Forum for Insurance Transition to Net Zero (FIT)
- The UN-convened Forum for Insurance Transition to Net Zero (FIT) has launched a comprehensive guide titled "Underwriting the Transition," which aims to assist insurers and reinsurers in developing and disclosing credible transition plans that focus on climate risk and net zero, backed by science and environmental-science.
- The insurance sector is being encouraged to adopt transition plans, as demonstrated by Jean-Michel Beacco of Institut Louis Bachelier, who emphasizes the importance of rigorous, science-based approaches in this sector.
- The industry's engagement in transition plans is crucial, according to Guillaume Oreckin of Crédit Agricole Assurances, as it supports the move towards a less carbon-intensive economy and aligns with the broader goals of climate-change mitigation.
- The guides and initiatives from the UN FIT, such as "Underwriting the Transition," play a vital role in promoting climate-change action and fostering a more sustainable and resilient insurance sector within the broader context of finance and business.
