The report of the Bank of Russia on the impact of climate risks on the financial sector says that the strongest of them will suffer the insurers: they are threatened by the depreciation of the investment, the growth of payments and loss of reputation insurance environmentally unfriendly customers. Experts on green economy the Central Bank’s attention to their agenda is encouraging, but financial analysts say that insurance companies are not major investors in assets that may depreciate, and the insurance climate in Russia is insufficiently extended. Themselves insurers the resumption of the debate on the protection from climate risks support, hoping to join the green trend.The Bank of Russia published the report “the Impact of climate risk and sustainable development of the financial sector of the Russian Federation”. According to the regulator, financial institutions in different degree subject to risks associated with climate change, “and insurers are likely to be those most exposed to this risk due to the nature of its business.” The reasons are the depreciation of the investment due to the market reorientation “on the development of alternative energy sources and pollution control of the environment”, the growth of payments due to extreme weather events and reputational risks for insurers, insuring or investing in polluting sectors of the economy.As the Director of the program “Green economy” of the world wildlife Fund (WWF) Mikhail Babenko, the report of the Central Bank largely shared the ideas of the study WWF responsible Finance practices in the banking sector in December 2019. “In our view, it is necessary to conduct stress testing not only banking but also insurance sector for resistance to climatic and environmental risks,” he says. According to experts, if the European countries climate change issues have become mainstream, that in the Russian realities prevail over short-term and topical issues in water, air and soil, as in the case of accident at the enterprise of “Norilsk Nickel” with the oil spill. However, the report of the Central Bank hardly was a reaction to this event. “It is obvious that it is the result of the working group of the Central Bank on responsible financing, which is working in 2018,”— said the expert.”Investment and reputational risks associated with climate change and investment in polluting sectors of the economy, implemented through the reinsurance of most risks in the international market for the international insurance institutes important green trend”,— agrees the head of the research center for energy policy EUSP Maxim Titov. However, he believes that climate risks can become a source of profit — at the expense of green products, such as loans to increase energy efficiency of homes.The Director of the group ratings financial institutions ACRA Alexey Bredikhin assumptions of the Central Bank that the insurers will suffer from climate risks better than others, does not share: the company can rates to compensate for the trend in the loss ratio, and from the shaft of the payments they protect low penetration of insurance in the country. In addition, insurers in Russia not to invest in the corporate sector. “Probably here in the first place on losses can be NPF, then the banks, and quite at the end of the queue — insurance companies,— the expert argues.— Reputation loss more banks that Fund polluting projects, and insurers, in contrast, insure risks”.The very same insurance lobby is looking to expand the market through environmental risk insurance. According to the head of the Russian Union of insurers Igor Jurgens, “the recent ecological disaster in Norilsk demonstrated the existing gaps in monitoring, and most importantly — the anticipation of such events, and also revealed one of the “boils” — more than 20 years of discussion on environmental insurance in the Russian Federation,” he says, calling it “the cheapest tool” environmental risk management.Tatyana Grishina
