A Study On The Optimization Of Climate Risk Management Of Ping An Insurance Based On The COSO-ERM(2017) Framework

Climate risk has a significant impact on the global economy and society.As risk managers,underwriters,and investors,insurance companies are more vulnerable to the effects of climate risk than other industries.In order to achieve carbon neutrality goals,insurance companies must have a thorough understanding of the impact and challenges of climate risk and effectively manage and respond to it to achieve high-quality,sustainable development.Currently,there has been positive progress in climate risk management research at home and abroad,but there is relatively less research on the impact and management strategies of climate risk from the microperspective of insurance companies.Therefore,insurance companies need to actively learn and apply the climate risk management experience of foreign insurance companies while also focusing on researching the impact of climate risk on the insurance industry from their own perspective and formulating corresponding management strategies to achieve sustainable development goals.This paper analyzes the current status of Ping An Insurance’s climate risk management and studies the problems and causes of Ping An Insurance’s climate risk management from the perspective of the COSO-ERM(2017)framework combined with relevant theoretical knowledge of climate risk management.Drawing on the advanced practice experience of climate risk management of foreign insurance companies,this paper explores the optimization of Ping An Insurance’s climate risk management from the dimensions of governance and culture,strategy and goals,implementation strategy,review and revision,information communication,and reporting.The aim is to provide constructive and actionable methods and suggestions for Chinese insurance companies to effectively carry out climate risk management.The research concludes as follows: Firstly,after analyzing and conducting interview surveys on the current state of climate risk management in Ping An,it was found that despite China Ping An’s emphasis on the importance of comprehensive risk management in recent years and the establishment of a range of internal controls and climate risk management systems to manage climate risks,there are still shortcomings in specific climate risk management processes,climate risk information disclosure,and internal and external oversight.Secondly,Further research analysis and interview surveys have revealed that the aforementioned issues primarily stem from inadequate comprehensive and in-depth understanding of climate risks,limitations in assessment methods and data quality,longer time horizons for climate risk management,and insufficient regulatory oversight of climate risk information disclosure.Lastly,Based on the five principles and their components of the COSO-ERM(2017)framework,as well as incorporating climate risk management theories and advanced experiences from foreign insurance companies,the following optimization suggestions are proposed for China Ping An to enhance climate risk management: improving the risk management system,fostering a risk management culture,establishing risk identification and prevention mechanisms,enhancing risk response and mitigation strategies,establishing a performance evaluation system,strengthening performance and significant change assessments,introducing external risk oversight,enhancing internal control supervision mechanisms,and establishing a robust information system.These recommendations aim to optimize China Ping An’s climate risk management.