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Climate-related risks expose insurer assets: California analysis

A report of the California insurance market has clearly indicated a need for insurers to seriously contend with the risks posed by climate change and how this can potentially impact investment portfolios, which amount to almost $43 trillion. Backed by the scenario analysis completed as part of this report, the California Insurance Commissioner Dave Jones, who is behind the ‘Climate Risk Carbon Initiative’, forewarns the need for insurers to take serious steps to account for the heightened exposure to climate-related risks. Risk management could include shifting portfolios towards companies that have a stake in a low-carbon economy, such as electric car companies, and addressing present risks to manufacturing facilities by setting up the appropriate adaptive measures. Unattended, the physical impacts of climate change will translate to very real economic losses, as evident by the fact that approximately 14- 17% of power assets will be exposed to flood risks in 2020.  Read more here.