ACPR pilot climate exercise (2020)
The first climate scenario exercise run by the French supervisor on banks and insurers, launched in July 2020 and published in May 2021.
A standard stress test shocks markets over one or two years; climate risk unfolds over thirty years, through public policies that do not yet exist. The ACPR exercise therefore asked institutions to project their balance sheets to 2050 under transition scenarios, orderly or delayed, and, for insurers, to measure the rise in physical claims, led by drought and flood. It set no capital requirement: its purpose was to learn how to measure, and to show where data was missing. It paved the way for later exercises and for EIOPA's expectations on climate analysis in the ORSA.
Launched in July 2020 on scenarios built from those of the NGFS, the exercise was published on May 4, 2021: it found the institutions' exposure moderate overall, but a sharp projected rise in natural catastrophe claims in some French departments by 2050.
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