Risks

With the update of the Group's Risk Management Policy in 2019, ESG risks have been integrated into the ERM Management Framework.

The Policy details seven main areas of ESG risk, including climate change, to which primary attention is paid and which is managed along the value chain, in particular with reference to underwriting and investment activities.

The cross-departmental ESG Risk Table, an operating work group that includes the Sustainability, Risk Management, Audit and Compliance Departments, has defined a detailed map of risks associated with climate change, as follows:

Type of riskRisk

Time horizon*

Climate change - physical risks Increase in technical risk and credit risk due to the increase in the frequency and seriousness of claims related to climate change consequences (acute and chronic physical risks) Medium term
Lack of insurability of climate-related risks due to poor resilience of the society Medium term
Damage to the Group's property and assets and business continuity Risk for Group sites and agencies / relating to the disruption of the supply chain (operational risk) Medium term
Decrease in value of the real estate portfolio related to exposure to climate risk, in particular with reference to tourism-related properties (financial risk)
Climate change - transition risks Decrease in the value of the investment portfolio in relation to businesses that do not meet expectations in terms of the transition towards a low-CO2 economy (financial risk) Medium term
Negative impact on reputation due to the underwriting of insurance contracts and investments in companies whose transition path towards a low-CO2 economy is deemed insufficient by stakeholders (reputational risk) Short term

*(Short = 1 to 3 years; Medium = 4 to 10 years; Long = 11 to 30 years)

The Group integrates the safeguards of ESG risks, including climate change, within the individual categories of current risk, so as to manage them at all stages of the value-creation process and to mitigate the onset of any reputational risks related to ESG risks. These safeguards are also designed to prevent the concentration of exposures to areas and/or sectors that are significantly exposed to ESG risks.