As Climate Change Impacts the Insurance Market, Islamic Banks should Identify Their Major Climate-related Financial Risks

The impacts of climate change are being felt now, and in the process are having a multifarious impact on the financial systemThe tension in addressing climate-related risks between consumers, insurers and regulators may lead to insurers' exit as risks begin to materializeThe exit of insurers as a result of climatic risk will have a major knock-on impact across the financial system, including for Islamic banks

Wildfires in California are highlighting some of the indirect risks that climate change is causing for financial institutions and investors in real estate. Forest fires that are made more severe by climate change are becoming a greater source of losses to insurance companies, which in some places has led observers to say the marketplace has lar...