Stress and scenario testing is a common challenge for insurers as they embed risks related to climate change within their risk management frameworks. As stress and scenario testing develops and evolves, we anticipate that understanding of climate change-related risks will rapidly improve. In this paper, we review the following topics regarding the management of climate-related risks:

• Current market practices with respect to climate change risk scenario testing
• Common challenges firms face and effective practices they can implement
• A case study that demonstrates how firms could incorporate a potential future development to improve stress and scenario testing
• Helpful resources for firms developing scenario testing frameworks