MetLife has built strong risk management processes and procedures into the company’s internal operations and lines of business that help us foresee, manage and mitigate risks and events that might impact operations.
These include incidents relating to climate change and the environment. Climate change risks — such as impacts from extreme weather events, disruptions in energy supply, or carbon legislation — have the potential to impact MetLife’s physical operations, investments and supply chain. These risks, as well as associated opportunities, are monitored, managed and reported up to MetLife’s Board of Directors through our global risk management framework.
MetLife assesses world, economic, industry and internal events to identify potential emerging risks. Climate change and water scarcity are examples of environmental risks that we are currently assessing. MetLife also assesses climate-related risks in the company’s investment portfolio through MetLife Real Estate Investments’ semiannual Event Risk Analysis.
MetLife’s global business continuity and crisis management programs prepare and respond to climate- related incidents that may impact our services and operations. We implement site-specific risk mitigation and action plans and have local crisis management teams to manage incidents at each of our global offices.
In the property and casualty line of business, MetLife has long recognized the possibility that catastrophe-related losses may vary significantly from expected amounts. In response, we have historically monitored, and continue to monitor, our spread of risk monthly. We conduct analyses and climate modeling to identify the geographic areas that could produce the largest catastrophe losses.
We review the reinsurance market and reinsurance costs in light of the possible impact of climate change, and we purchase catastrophe reinsurance, as appropriate, to mitigate potential losses from a large event. We follow a consistent annual process to re-evaluate our catastrophe models, risk concentrations, the latest climate change science and reinsurer financial strength requirements.