{
  "docId": "019dd923-5ca1-7489-b639-8827c17e5ed9",
  "docSlug": "41a33bc1bcbb8d0e",
  "documentTitle": "Sustainability Risk Under Solvency II",
  "authorId": "OliverWyman",
  "authorName": "Oliver Wyman",
  "documentKindSlug": "consulting-deck",
  "documentKindLabel": "Consulting deck",
  "sourceTypeSlug": "strategy_consulting",
  "sourceTypeLabel": "Strategy consulting",
  "presentationDate": null,
  "orientation": "landscape",
  "aspectRatio": 1.4,
  "pageNumber": 11,
  "pageCount": 40,
  "prevPage": 10,
  "nextPage": 12,
  "slideType": "diagnosis",
  "function": "diagnose",
  "density": "dense",
  "nDataPoints": 0,
  "notes": "The diagram illustrates a hierarchical breakdown of climate risk into physical and transition components, which then manifest as specific financial risks (credit, market, liquidity, operational, underwriting, legal/reputational).",
  "elementsJson": [
    "headline_text",
    "bullet_list",
    "process_diagram",
    "callout_box",
    "footnote"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-5ca1-7489-b639-8827c17e5ed9/11",
  "deckHref": "/decks/019dd923-5ca1-7489-b639-8827c17e5ed9",
  "deckJsonHref": "/decks/019dd923-5ca1-7489-b639-8827c17e5ed9.json",
  "deckAnchorHref": "/decks/019dd923-5ca1-7489-b639-8827c17e5ed9#slide-11",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "On a short- to medium-term perspective, we expect transition risks and their effects on equities and fixed income in particular to be the main contributors to increased risk for insurers.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd951-d9ef-7323-a2e3-f5cf4beec09e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.5,
        "w": 0.4,
        "x": 0.55,
        "y": 0.25
      },
      "kind": "diagram",
      "text": "Climate Risk -> Physical/Transition Risks -> Credit, Market, Liquidity, Operational, Underwriting, Legal/Reputational risks",
      "attrs": null,
      "subkind": "process",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c13dcf12-94f3-4d32-9cf0-54225d283aeb",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.5,
        "w": 0.45,
        "x": 0.05,
        "y": 0.25
      },
      "kind": "list",
      "text": "Typical asset portfolios carry significant climate risks: Transitional risks can have material effects on fixed income and equity in particular. Physical risks may impact real estate holdings or exposed equities. Underwriting Risk may stem from both physical and transition risk. For life insurers, the risk exposure on a short- to medium-term perspective is typically strongly dominated by market and credit risk. Consequently, we see the main risk exposure in the SII-context for most insurers in transition-related market and credit risks.",
      "attrs": null,
      "subkind": "bullet",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "79a6f139-3dab-4254-81df-cfa286a578ba",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.9,
        "x": 0.05,
        "y": 0.8
      },
      "kind": "paragraph",
      "text": "On a short- to medium-term perspective, we expect transition risks and their effects on equities and fixed income in particular to be the main contributors to increased risk for insurers.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "53cd730a-4f52-4485-9558-a1627e8ef211",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.5,
        "x": 0.05,
        "y": 0.92
      },
      "kind": "source-note",
      "text": "1. As stated in EIOPA-BoS-20/341: Second Discussion Paper on Methodological Principles of Stress Testing",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f8491267-dab3-4a38-bca1-0c52a6a12c2b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.1,
        "w": 0.9,
        "x": 0.05,
        "y": 0.05
      },
      "kind": "title",
      "text": "THERE ARE SEVERAL TRANSMISSION CHANNELS THROUGH WHICH INSURERS MAY BE AFFECTED BY CLIMATE-RELATED FINANCIAL RISKS",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "66e47802-2c92-49c0-9844-b64f5c65ada4",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [
    {
      "name": "2x2 matrix",
      "slug": "matrix-2x2",
      "agent": null,
      "layer": "slide",
      "matchId": "579a36a7-b191-4359-bea9-2c78b22bf620",
      "evidence": "The slide features a diagram/process titled 'Climate Risk -> Physical/Transition Risks -> Credit, Market, Liquidity, Operational, Underwriting, Legal/Reputational risks', which can be interpreted as a 2x2 matrix or a simple framework.",
      "confidence": 0.8
    }
  ],
  "frameworks": [
    {
      "name": "causal-chain",
      "slug": null,
      "matchId": "49385e78-b393-4622-8bcc-63e5364be1c9",
      "evidence": "The diagram maps the transmission of climate risk through specific channels to financial risk outcomes.",
      "confidence": 0.9
    }
  ],
  "arcBeats": [
    {
      "to": 14,
      "from": 7,
      "beatId": "e5be16cc-be15-490c-bde1-ede54e5cf47c",
      "arcName": "The Consultant's Gambit",
      "arcSlug": "consultants-gambit",
      "beatName": "Problem & Complication",
      "beatSlug": "consultants-gambit-problem-complication",
      "evidence": "The deck delves into the specifics of sustainability risk under Solvency II, highlighting the challenges in modelling climate-related risks.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Complication",
      "parentBeatSlug": "complication"
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}