Quantifying climate uncertainty through forward-looking scenarios
Arocha & Associates GmbH conducts scenario analysis to help insurers, reinsurers, and corporates understand the financial implications of climate change under multiple plausible futures. This work supports governance and disclosure expectations from frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Network for Greening the Financial System (NGFS).
The analysis considers both physical and transition risks using pathways informed by the Intergovernmental Panel on Climate Change (IPCC) and International Energy Agency (IEA). Results are used to test portfolio resilience and inform climate disclosures consistent with ISSB S2 and CSRD.
Our Support Includes
Physical Risk Scenarios
We model the financial impact of acute and chronic climate events—such as floods, heatwaves, or sea-level rise—on insurance portfolios and asset exposures, using data aligned with IPCC and NGFS datasets.
Transition Risk Scenarios
We assess regulatory, technological, and market shifts under various decarbonization pathways, applying scenarios such as NGFS Net Zero 2050 and IEA Announced Pledges.
Integrated Financial Impact
We translate climate drivers into financial variables—loss ratios, capital requirements, or investment valuations—linking results with Solvency II, IFRS 17, and internal ERM models.
Methodology and Process
Our process follows TCFD recommendations for scenario analysis and NGFS methodological guidelines. It includes selecting relevant scenarios, quantifying exposures, and interpreting financial outcomes.
- Identification of material climate drivers for underwriting and investment portfolios
- Calibration of scenarios using NGFS and IPCC data sources
- Communication of outcomes consistent with disclosure frameworks (TCFD, IFRS S2, CSRD)
Why Choose A&A
Typical Engagement Outcomes
- Quantified physical and transition risk assessments under NGFS and IPCC scenarios
- Integration of scenario outputs into Solvency II and ERM capital frameworks
- Enhanced TCFD and CSRD climate disclosure narratives
- Improved board and regulatory understanding of climate resilience
Ready to Talk?
Whether your goal is to meet TCFD disclosure requirements or integrate NGFS climate scenarios into your risk models, A&A can help you develop robust, transparent, and quantitative scenario analyses.