BoE exercise: No additional action scenario on climate change ups UK insurer losses by 50%

UK general insurers could face at least a 50% increase in average annualised losses in a non additional action on climate change scenario, a report by the Bank of England has detailed.

The Bank ran its first exploratory scenario exercise on climate risk last year involving the largest UK banks and insurers. It published the findings on 24 May.

The exercise included three scenarios (sees box) of early action and late action to reach net zero emissions globally by 2050 and a third where no additional action is taken.

Early action: Ambitious climate policy including increasing carbon taxes reduces global carbon dioxide emissions to net zero by around 2050