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  "documentTitle": "Sustainability Risk Under Solvency II",
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  "notes": "The slide uses a 2x2 matrix to categorize climate scenarios (Orderly, Disorderly, Too little too late, Hot house world) and a hierarchical diagram to show the focus on transition risks.",
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      "text": "Considering that asset allocations are typically strongly dominated by fixed income and SCR attributions are typically dominated by market risks, impacts through physical risk transmission channels are likely to be immaterial compared to market transition risks in the context of SII coverage ratios.",
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      "text": "Climate risk decomposition into physical and transition risks, further broken down into specific risk types.",
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      "text": "As an example, for a typical life insurer, sources of physical climate change risk are possibly increased mortality or invalidity rates on the underwriting side and property risks on the market side. Considering that asset allocations are typically strongly dominated by fixed income and SCR attributions are typically dominated by market risks, impacts through physical risk transmission channels are likely to be immaterial compared to market transition risks in the context of SII coverage ratios.",
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      "text": "In the discussion paper, EIOPA stresses the importance of the interlinked nature of physical and transition risks discussed on slide 11. This approach focuses on transition risk and its impact on market and credit risk in particular. Depending on the insurers primary line of business, physical risks may however indeed be immaterial on short- to medium time horizons.",
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      "text": "Transmission channels under consideration with respect to EIOPA guidelines",
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      "text": "1. EIOPA-BoS-20/341: Second Discussion Paper on Methodological Principles of Stress Testing",
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      "text": "THIS APPROACH FOCUSES ON TRANSITION RISK, SINCE WE CONSIDER PHYSICAL RISKS TO BE LESS RELEVANT ON SHORT- TO MEDIUM TIME HORIZONS",
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