Climate storylines to build resilience for European public and private risk finance instruments against remote events

Europe is increasingly threatened by climate-induced events happening remotely from the continent. To test the resilience of selected public and private finance risk instruments against external shocks we analyse multiple hypothetical scenarios based on historic events, focusing on cyclone risks, and various alternative realisations, so-called climate storylines. We present the storyline approach as a systems approach to examine whether events outside a system can affect elements within the system. Furthermore, we provide a framework to analyse possible transmission channels of such remote events jointly as well as separately. In doing so we combine a multi-model approach within single and multi-climate storylines to better address the various vulnerabilities of risk management and adaptation options for today and in the future. We specifically focus on humanitarian emergency assistance (via the Caribbean Catastrophe Risk Insurance Facility), public sector governance help (via the European Union Solidarity Fund), macro-economic financial effects (by assessing international financial flows and investment decisions) and consequences to insurance uptake due to remote climate events (via increases in risk aversion of reinsurers). The experiences made with this approach are compared with the advantages and disadvantages of both storylines and probabilistic assessments and we provide ways forward for a unified approach. • Remote risks to Europe can affect and exacerbate stress of public and private risk instruments. • Climate storylines can be used to combine multi-model approaches for remote risks. • Stress tests can be used to determine critical performance levels and adaptation options. • Storylines and probabilistic approaches should be used in conjunction when risk instruments and interactions analysed.