MinterEllisonRuddWatts has outlined key considerations for insurers finalising their second-year climate-related disclosures (CRDs), noting that regulatory expectations have increased.
The law firm’s observations draw from the Financial Markets Authority’s (FMA) December 2024 review, disclosures submitted to date, and a June 2025 research study by Mosaic Financial Services Infrastructure.
Six of the 16 licensed insurance climate reporting entities (CREs) have submitted their second-year statements as of mid-July 2025.
The remainder are expected to lodge theirs before the Jan. 30, 2026, deadline.
Climate-related risks continue to affect insurers’ core operations, from underwriting and claims to investment and reinsurance.
General insurers are dealing with physical risks, such as increased costs linked to more frequent natural disasters, higher reinsurance premiums, and levies from natural hazard funding bodies.
At the same time, life and health insurers are beginning to account for emerging risks that are less direct, such as health impacts from extreme weather or shifts in investment markets due to climate policy changes.
The New Zealand climate reporting framework, governed by the Financial Reporting Act 2013 and Aotearoa New Zealand Climate Standards (NZ CS), is intended to promote transparency around these risks and help investors understand how climate issues are managed.
In its Insights Report, the FMA provided detailed guidance for all CREs, including insurers.
The report highlighted the importance of materiality, balanced disclosure, and the need to avoid overly general statements.
Insurers are advised to:
One point of emphasis was the treatment of weather events such as Cyclone Gabrielle.
In the first year of reporting, most insurers noted increased claims but did not quantify the business impacts.
The FMA has indicated that future statements should improve in this area.
For the second year, insurers must comply with two new mandatory elements under NZ CS 1: the disclosure of current financial effects of climate change and the inclusion of transition plans aligned with internal investment decisions.
Adoption provisions, which allow CREs to delay certain disclosures, have also changed.
Two provisions used in year one (Adoption Provisions 1 and 3) have now expired, while a new provision (Adoption Provision 8) has been introduced. This allows insurers to exclude Scope 3 emissions from their assurance processes.
Despite this flexibility, insurers are still expected to report Scope 3 data where possible.
The External Reporting Board (XRB) extended the use of one Scope 3 exemption for another year due to industry challenges with emissions data collection.
The six insurer CREs that have submitted second-year disclosures have approached the task differently.
Meanwhile, AIA and Partners Life opted to integrate their climate statements into their broader annual reports while maintaining clearly demarcated climate-specific sections. These sections average 21 to 22 pages in length.
Across all six statements, insurers showed a shift toward more balanced presentation.
Language has moved away from overly positive framing, and governance-related disclosures are more detailed.
Boards and internal committees are now identified more clearly, with frequency of oversight and specific responsibilities outlined.
Some insurers have revised internal structures. One firm disbanded its CRD working group, transferring responsibilities to existing risk or governance functions. Another insurer created a dedicated team to manage climate reporting and strategy.
Insurers used the same scenario frameworks in their second year as in their first.
Life insurers like Chubb Life and Resolution Life relied on Financial Services Council models, while QBE and Swiss Re used frameworks from the Network for Greening the Financial System.
Retaining consistent scenarios is seen as aligning with the principle of comparability under NZ CS 3, helping stakeholders assess changes over time.
As more insurers prepare to submit second-year CRDs, MinterEllisonRuddWatts expects greater specificity and fewer generic statements.
Disclosures are likely to maintain similar lengths to year one, although the inclusion of new required sections could result in modest increases.
Insurers may also need to restate information from prior reports if material errors are identified.
The FMA has noted this possibility and expects accurate restatements to be included in subsequent filings under NZ CS 3.
Insurers with significant investment portfolios – particularly in life insurance – may also need to evaluate transition risks related to international policy developments.
Recent changes in US political leadership, for example, have led to shifts in climate policy that could affect long-term investment planning.
Although quantifying the direct impact of such developments may be difficult, MinterEllisonRuddWatts noted that insurers should assess their relevance as part of their transition planning disclosures.
Mosaic FSI’s analysis of year one disclosures found that only 13% of insurers provided investment emissions data, compared with 38% of banks and building societies.
While the business models differ, the findings suggest insurers could improve disclosure of emissions linked to their investment activities.
According to the law firm, challenges in methodology and access to emissions data are valid barriers but should not prevent insurers from seeking to enhance transparency over time.
As the CRD regime moves into its second year, insurers are expected to show stronger alignment between strategy, governance, and climate risk management – shifting from compliance-driven reporting toward clearer communication of material risks and financial impacts.
