This paper introduces CATALIST, a detailed sectoral model of the Spanish economy, to assess transitional risks from climate policies like carbon pricing. It reveals varied sectoral impacts, potential financial stability risks, and growth opportunities via smart tax revenue use, offering a versatile tool for policy and scenario analysis.
Insurance decisions range from trivial to significant, accumulating impact over time. Intuition can mislead, especially when premiums rise due to risk. Key factors include hazard size, wealth, risk aversion, and insurer margins. Greater transparency in insurance margins can help families make informed choices, improving financial well-being and societal welfare.
This article also has links to a calculator and spreadsheet which apply the framework described herein.
The EBA report found ESG data is improving but still incomplete. Upcoming regulations like CSRD and ESRS, plus greater transparency in ESG ratings, are expected to significantly enhance data availability and accessibility.
EIOPA issued guidance to harmonize supervisory approaches to insurers’ foreseeable dividend deductions. It acknowledges different methods—annual full deduction, quarterly accrued, and post-approval deduction. While supporting the quarterly approach, EIOPA sees annual full deduction as viable in stable environments. The guidance aims to enhance supervisory convergence amid the Solvency II review.
The EU's Digital Services Act and Corporate Sustainability Due Diligence Directive both require large companies to implement internal risk management systems. This approach, however, strengthens corporate power by minimizing regulatory costs, reinforcing technocratic solutions, and enabling corporations to evade responsibility for negative social impacts by framing them as external risks. This procedural focus hinders effective enforcement.
Natural disasters drive insurance premium increases in affected areas for three years and cause delayed, smaller rises in unaffected areas. Insurers also adjust rejection rates, particularly in low-income regions. Financial constraints influence cost distribution, raising concerns about equity and affordability as climate risks grow and insurers adapt pricing strategies.
The insurance sector faces pressure from rising catastrophic risks, leading to higher premiums and policy non-renewals. This paper proposes an arbitrage-free method for pricing catastrophe reinsurance using the compound dynamic contagion process and Esscher transform. The findings help insurers assess liabilities amid emerging risks like climate change, cyberattacks, and pandemics.
Significant risk transfer (SRT) securitization is increasingly used by major EU banks for risk and capital management. It provides flexible, reasonably priced capital, improving balance sheets and capital ratios. Supervisors assess risk transfer for capital relief. The SRT market has grown substantially and is a key tool for European banks.
The EBA published final draft ITS for a Pillar 3 data hub, centralizing prudential disclosures. It outlines IT solutions, data formats, and validations. A transition period runs from June to December 2025. A pilot exercise informed the final ITS, with onboarding details expected by Q1 2025.
The EU AI Act's implementation begins after a 3-year legislative journey, requiring national authorities to clarify and enforce it. This policy brief outlines Belgium's tasks under the Act, including scope application, exemptions, and the designation of competent authorities to manage AI-related responsibilities.