Stress Testing

Bank of England insurance stress-test

The 2° Investing Initiative is supporting the Bank of England in the design of its 2019 stress-test for insurance companies (IST 2019).

The stress-test was launched on June 18th, 2019 by the Bank of England. You can access the stress-test documentation here. UK insurance companies or other organizations wishing to apply the stress-test can from July 30 run the stress-test on the Transition Monitor website for free and anonymized. Users will be able to generate the stress-test results in combination with a freely available excel tool and the online PACTA scenario analysis software. For information on how 2°ii has applied the methodology, please refer to this document here.

The tool uses the breakdown of exposure to different climate relevant sectors to calculate the effect of climate stress on the value of the portfolio. These exposure values can be generated using the PACTA scenario analysis results and fed directly into the Excel based stress test by clicking on participate above and following the instructions. Alternatively you can directly download the Excel based tool here and use your own portfolio exposure values.

For this website 2° Investing Initiative uses a stand-alone server, i.e. no other website or information is stored on the server. The server is set up in compliance with the security standards of the German Federal Data Protection Act (BDSG, "Bundesdatenschutzgesetz"), Tele Media Act (TMG, "Telemediengesetz"), and is built on infrastructure that is DIN ISO/IEC 27001 certified. All uploaded data will be deleted after performing the analysis. All analytical results will only be shared (downloadable) exclusively with the respective user of the tool.

If you have any questions about this process or want to find out more about our stress-testing work programme, contact us.