EIOPA tightens insurer taxonomy disclosures, targets underwriting comparability
EIOPA targets insurer taxonomy disclosures for stronger underwriting comparability
EIOPA on Wednesday launched a consultation that would narrow EU Taxonomy underwriting disclosures for insurers to taxonomy-eligible business lines, standardise natural catastrophe premium splits and test a new measure of taxonomy-aligned insured activities. The proposals respond to a European Commission request in March for technical advice on simplifying and improving the Disclosures Delegated Act (DDA) under the Taxonomy Regulation. Final advice is expected by October.
The consultation matters for insurers because it would change how non-life underwriting is presented in sustainability reporting, rather than changing prudential capital treatment. EIOPA said the proposals would increase transparency, simplify reporting and align insurers’ Taxonomy reporting more closely with other sustainable finance frameworks and financial institutions.
Underwriting taxonomy ratios
EIOPA is trying to make underwriting disclosures more comparable. It is concerned that different approaches to the Eligibility ratio numerator have made disclosed ratios hard to compare, particularly where multi-risk contracts contain only a partial natural catastrophe component.
- Adaptation Underwriting KPI: EIOPA proposes renaming the current underwriting Key Performance Indicator (KPI) as the Adaptation Underwriting KPI and narrowing the denominator in the Taxonomy and Eligibility ratios to Taxonomy-eligible lines of business only.
- Eligible business lines: The denominator would be limited to eight eligible Solvency II Lines of Business, as defined under the Climate Delegated Act for climate change adaptation.
- Natural catastrophe premiums: The Eligibility ratio numerator would include only the specific proportion of premiums that explicitly covers climate-related natural catastrophe perils, with only contracts containing such coverage included.
- Split-premium approach: EIOPA does not support removing the split-premium approach for insurance and reinsurance undertakings, and would maintain the current split-of-premium method in the numerator of Taxonomy alignment.
The denominator change would reduce dilution from business lines that cannot qualify under the current Taxonomy climate adaptation treatment. The numerator change would require insurers to isolate the part of a contract that actually covers natural catastrophe risk, rather than counting broader multi-risk premiums where only part of the policy relates to eligible climate-related peril coverage.
Green insured activities
The Commission’s initial request asked for a methodology that would allow insurers to report the share of non-life underwriting that covers Taxonomy-aligned companies and assets. That methodology would disclose the enabling role of underwriting where insurance supports environmentally sustainable economic activity.
- Green Insured Activities KPI: EIOPA is considering a Green Insured Activities KPI to measure the ratio of Taxonomy-aligned insured activities. It would cover policies sold to companies reporting under the Taxonomy Regulation, as well as retail housing and transport insurance policies.
- Look-through consistency: The KPI would report the amount of green insured business and create consistency with the look-through approach used in banking and investment disclosures.
- Possible deferral: EIOPA proposes adding the KPI in five years, with the consultation also asking whether the requirement should be deferred. The proposed formula divides total environmentally sustainable insured activities by total eligible gross written premium (GWP).
This would be a different disclosure concept from the Adaptation Underwriting KPI. The existing underwriting measure focuses on insurance activity that is eligible or aligned for climate adaptation, while the proposed Green Insured Activities KPI would look through to whether insured companies or assets are Taxonomy-aligned.
Investment templates and group reporting
The investment side of the package is less extensive than the underwriting changes, but EIOPA is also proposing template changes that would affect how insurers present Taxonomy data in annual reports.
- Gas and nuclear breakdowns: EIOPA advised removing gas and nuclear breakdowns from both investment and underwriting templates. For underwriting, EIOPA said the disclosures are not applicable; for investment, EIOPA said they are usually not material and removal would align with the 2026 Omnibus Delegated Act materiality approach.
- Group reporting: EIOPA, the European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA) propose focusing group reporting on the parent company’s main business, rather than requiring weighted averages across all business segments.
- Operational expenditure: EIOPA proposes not to add voluntary reporting on the Taxonomy alignment of investments based on Operational Expenditure (OpEx).
Removing the gas and nuclear split would reduce the volume of template detail that insurers publish where EIOPA considers the information less decision-useful. The group reporting change would also avoid producing blended ratios across unrelated business segments where the parent company’s main business gives a clearer view of the group’s Taxonomy disclosure profile.
Existing disclosure base
EIOPA’s review of reported data shows why the underwriting measure is being revisited. Average Taxonomy-aligned underwriting activities were approximately 3%, Taxonomy-eligible but not aligned activities accounted for around 17% of premiums, and non-eligible activities represented approximately 80% of premiums. The sample comprised 15 insurance undertakings for the underwriting KPI and 16 undertakings for the investment KPI.
The low aligned share means changes to numerator and denominator design can materially alter how underwriting activity is presented, even without changing the underlying insurance portfolio. For investors using insurer sustainability disclosures, the consultation is therefore about comparability and interpretation of reported ratios, not about capital relief or asset eligibility.
Materiality and disclosure simplification
EIOPA’s proposals sit within a wider simplification effort for Taxonomy disclosures. The EU Taxonomy Regulation is the legislative framework for defining economic activities as environmentally sustainable, and financial undertakings must report the proportion of exposures to eligible activities in total assets.
- De minimis threshold: A quantitative de minimis threshold of 10% would treat an activity, asset or revenue as not financially material for Taxonomy eligibility assessment below that level. The exemption would be assessed separately for each performance indicator.
- Immaterial exposures: Economic activities or exposures accounting for less than 10% of the respective nominal value of Taxonomy key figures, including the Green Asset Ratio, could be excluded from Taxonomy assessment.
- Non-reporting counterparties: Green Asset Ratio exposures to non-reporting counterparties would no longer have to be included in the denominator in future.
For insurance investment disclosures, the materiality threshold is relevant because it determines which exposures must be assessed before a Taxonomy ratio is calculated. That is separate from the underwriting KPI changes, but both changes point to a narrower set of reported data points and more standardised ratios. ---
Legislative path
Stakeholders have until 12 August 2026 to respond to EIOPA’s consultation, and an online public hearing is scheduled for 16 July from 09:00 to 12:30 CEST. The Commission expects final technical advice by October, with adoption of amendments to the Disclosures Delegated Act expected by Q1 2027.
