Malaysia is one of the jurisdictions in Asia mandating that insurers conduct industry-wide climate stress testing. Bank Negara Malaysia, which oversees Malaysia's financial institutions, published a policy document titled “2024 Climate Risk Stress Testing Exercise – Methodology Paper,” outlining the scope, approach, and requirements of the first industry-wide Climate Risk Stress Testing (CRST) exercise. This e-Alert aims to provide a brief summary of the key requirements of the 2024 CRST for insurance companies, followed by several key considerations for climate risk stress testing. The alert includes:

• An overview of the 2024 CRST
• Climate scenarios
• Insights: Planning for 2024 CRST implementation
• Conclusions and next steps for insurers