Insurers are struggling to prepare for new climate risk requirements set out in Supervisory Statement SS5/25, with fresh survey data indicating widespread implementation gaps and limited confidence across the sector.
Crowe surveyed 67 insurers, primarily headquartered in the UK, US and Bermuda, and found that 97% expect the rules to affect their business. Despite this near-universal impact, many firms remain at an early stage of readiness and face constraints linked to resourcing, expertise and competing priorities.
The SS5/25 framework, published in December and due to take effect in June 2026, raises supervisory expectations for how insurers and banks identify, assess and manage climate-related financial risks. According to the survey, 57% of respondents are still reviewing the rules and preparing papers for senior management or boards, while only 20% have completed that process.
More than half, 51%, have not yet conducted a gap analysis, even as the compliance deadline approaches.
Respondents identified climate scenario analysis as the most demanding component of preparation. Around 69% said this area will require the greatest effort, followed by defining climate risk appetite (31%) and updating climate risk assessments (30%). These findings point to the technical and modelling complexity associated with forward-looking climate risk evaluation.
Operational barriers remain a major concern. Lack of time or sufficient resources ranked as the top obstacle, cited by 82% of firms. Competing corporate priorities followed at 71%, while 46% pointed to shortages of specialist expertise. Some respondents also reported difficulty securing senior management buy-in and coordinating cross-functional input across business units.
Confidence levels remain modest when firms assess climate risk materiality and proportionality—core concepts within the SS5/25 framework. Only 14% of respondents said they feel very confident in this area, while 57% described themselves as only moderately confident, often referencing gaps in existing processes and methodologies.
Alex Hindson, partner and head of sustainability at Crowe, said establishing solid foundations is critical because proportionality depends on clearly defining which climate risks are genuinely material. He said firms should not delay, as multiple workstreams will take time, and should use gap analysis to build strategic action plans rather than simply aim to meet the June deadline.
He also said climate scenario analysis will demand significant investment and must be tailored to each firm’s business model to generate meaningful insight. Hindson added that industry knowledge-sharing will be essential as climate risk evolves rapidly, helping avoid duplication and encouraging consistent best practice.
When asked what would most help them progress, respondents most often cited the need for clearer best-practice guidance. They highlighted demand for practical direction covering implementation approaches, materiality thresholds, proportional metrics, action planning and scenario analysis examples. According to the findings, greater clarity would increase confidence, reduce uncertainty and support more consistent climate-risk management across the insurance sector.
