According to Fitch, climate-related risks are not explicitly captured within the Prism model. However, exposure to natural catastrophe risk, which is influenced by physical climate change, is considered an explicit input.
Such risks may also impact the scoring of rating drivers outside the model if they are deemed sufficiently foreseeable and material. For instance, excessive exposure to natural catastrophe risk, and consequently to physical climate change risk, could influence evaluations of financial performance and earnings due to claims volatility, as well as assessments of a company's profile because of associated business risks. Additionally, significant exposure to real estate investments vulnerable to transition risks may affect assessments of an insurer's investment and asset risk.