South Africa’s central bank plans to expand the climate risk testing to the insurance industry, as it tries to expect risks that can carry out far -reaching economic losses.
“This year, we gave our first climate danger scene, a joint tension test, where we allow all banks to tell us how they will respond to the tensions,” said Fundy Shazibana, deputy governor of the South African Reserve Bank. “We are developing to go to the Insurance Sector,” he told a program in South Africa’s Stelon Bush on Friday. “
The SARB said the report would be released on June 19 with a review of its financial stability.
When the planet is heated and the weather wings spreads, weather compound events – such as heavy rains and droughts that were before the deadly forest fire in southern California earlier this year – is taking risks all over the world.
In February, the fire surrounded the large parts of Cape Town’s historic table Mountain, where an hour away from where he spoke. In addition to the drought, South Africa has been suffering from fatal floods in recent years.
He said how much measure a bank’s loan book is that there is a credit risk for borrowers from climate risks.
Climate incidence can be directly directly, which causes material losses for insurance, but can also weigh on the economy by affecting tourism, or by putting inflation through food prices, if the farmer is badly disrupted.
He said that the cost of floods reached 54 billion rinds ($ 3 billion) in 2022, while severe drought has increased South Africa’s food prices by 10 percent, resulting in an increase of 3 percent of the overall inflation.
“What is different about climate risks is that they are multi -dimensional,” he said. “It’s coming from all sides.”
Photo: Deputy Governor of the Reserve Bank of South Africa Fundy Tuszbana; Photo Credit: Waldo Sweegers/Bloomberg
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