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Insurance related with climate change in Chile

Published 24 January 2022

In 2018 the IAIS already spoke of three types of risks associated with climate change that could affect insurers, involving strategic, operational and reputational challenges: Physical Risks; Transition Risks, and Liability Risks.

The impacts of climate change on the local insurance market have focused on the incorporation of risk management and governance. In this context and within the framework of COP 26, the authority (CMF) recently published a new regulation that incorporates information requirements on sustainability and corporate governance in the companies' Annual Reports (NCG N ° 461) applicable to all supervised entities, within which are insurance companies. Based on these provisions, the new Annual Report must be structured on an integrated reporting approach, which includes information both on the entity's profile and its corporate governance as well as on its risk management system, strategy and business model.

The aforementioned standard seeks that said entities report the policies, practices and goals adopted in environmental, social and governance (ESG) matters so that investors and the public in general can evaluate and select those alternatives in which their interests would be better protected.

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