Regulator highlights a transition risk facing insurers that may be more acute for takaful operators

European insurance regulator EIOPA has found significant transition risk exposure in the reported investment holdings of the insurers it overseesDue to more limited scale, fewer Shariah-compliant fixed income markets and greater exposure to transition-risk economies, takaful operators may face heightened riskRFI Foundation’s research illustrates an example of the transition risk facing takaful operators that could be mitigated if the opportunity set of green & sustainable sukuk was larger

Insurers have been at the forefront of many changes relating to climate change because they face the brunt of the risks relating to increasing frequency and severity of storms. The European Insurance and Occupational Pensions Authority, or EIOPA, has expanded the climate risk sensiti...