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BoE warns insurers of possible "huge hit" over fossil fuels
[LONDON] Insurers may face a "huge hit"if they end up being wrongfooted by rule changes linked to climate change, the Bank of England said on Tuesday.
Paul Fisher, deputy head of the BoE's Prudential Regulation Authority (PRA), which supervises banks and insurers, said insurers investing in fossil fuel assets could be left"stranded" by policy changes which limit their use. "As the world increasingly limits carbon emissions, and moves to alternative energy sources, investments in fossil fuels and related technologies, a growing financial market in recent decades, may take a huge hit," Mr Fisher told an Economist conference. "There are already a few specific examples of this having happened." The BoE has been analysing the risks and will deliver a report to the government later this year. "We are seeking to understand how these changes may impact upon the PRA's objectives and how that could shape our role going forward," Mr Fisher said.