Climate and Nature Governance

Climate and Nature Governance Strategies

In the face of threats from extreme weather and the loss of natural capital, strengthening climate and natural ecosystem resilience while advancing both environmental conservation and shared well-being is an unavoidable challenge for business today. KGI Life is committed to its sustainable transition by aligning with international standards, strengthening its climate and nature management in line with the Task Force on Climate-related Financial Disclosures (TCFD) and Taskforce on Nature-related Financial Disclosures (TNFD) frameworks, and benchmarking against IFRS S1 and S2, the Sustainability Disclosure Standards issued by the International Financial Reporting Standards (IFRS) Foundation to ensure the quality and verifiability of its information.

TCFD

TNFD

Select a climate risk scenario analysis category

Flood Physical Risk Scenario Analysis Climate Change Scenario Analysis for Investment Assets Life Insurance Climate Scenario Analysis

Select a flood scenario analysis subject

Investment Property Self-Owned Property Suppliers

Scenario: Flood physical risk in 2030, 2040 and 2050 was assessed under two IPCC AR6 scenarios: the low-emission SSP1-2.6 and the very high-emission SSP5-8.5.
Assessment: For the investment properties held, hazard and vulnerability were analyzed by administrative district, floor level, building type and adaptation measures. Climate risk sensitivity is rated on a scale of 1 to 5, with Level 5 the highest risk.
Results: After adaptation, no case reached climate risk sensitivity Level 5 in 2050 under either scenario. Expected potential value loss was 0.16% and 0.14% of total investment property value respectively — a minor financial impact.

Scenario: Flood physical risk in 2030, 2040 and 2050 was assessed under two IPCC AR6 scenarios: the low-emission SSP1-2.6 and the very high-emission SSP5-8.5.
Assessment: For 23 self-owned business locations, hazard and vulnerability were analyzed by administrative district, floor level, building type and adaptation measures, with climate risk sensitivity rated on a scale of 1 to 5.
Results: Before adaptation, no location reached Level 5 in 2050 under either scenario, with Level 4 locations at 4.3% and 8.7% respectively. After accounting for floor level, disaster prevention management and business continuity plans, no business location remained at high sensitivity (Level 4 or 5).

Scenario: Flood physical risk for leased data center suppliers was assessed under two IPCC AR6 scenarios: the low-emission SSP1-2.6 and the very high-emission SSP5-8.5.
Assessment: The locations of domestic leased data center suppliers under contract were inventoried, and hazard and vulnerability analyzed by administrative district, floor level, building type and adaptation measures, with sensitivity rated on a scale of 1 to 5.
Results: In 2025 there was one leased data center supplier. Before adaptation it was rated Level 4 in 2050 under both scenarios. Factoring in geographical conditions, flood control equipment, disaster prevention management and business continuity plans, the rating dropped to Level 2.

Select an investment asset risk type

Market Risk Credit Risk

Market Risk Impact Results

Three NGFS scenarios — Orderly Transition (Net Zero 2050), Disorderly Transition (Delayed Transition) and Fragmented World — were used to quantify the market risk to the equity portfolio arising from carbon pricing costs.

Orderly Transition
Disorderly Transition
Fragmented World

Total Expected Loss as a Percentage of Asset Holdings

0.61% 0.00% 0.24%

1.89% 0.42% 0.52%

3.67% 1.01% 0.60%

6.43% 2.10% 0.63%

11.88% 3.52% 0.68%

2030Orderly 0.61% / Disorderly 0.00% / Fragmented 0.24%
2035Orderly 1.89% / Disorderly 0.42% / Fragmented 0.52%
2040Orderly 3.67% / Disorderly 1.01% / Fragmented 0.60%
2045Orderly 6.43% / Disorderly 2.10% / Fragmented 0.63%
2050Orderly 11.88% / Disorderly 3.52% / Fragmented 0.68%

Credit Risk Impact Results

The change in additional expected loss (ΔEL%) relative to the baseline was examined for domestic and foreign debt, equity and sovereign debt positions under the Orderly Transition, Disorderly Transition and Fragmented World scenarios.

Domestic and Foreign Investments (Weighted Average)
Sovereign Debt
Domestic and Foreign Investments and Sovereign Debt (Weighted Average)

Additional Expected Loss in 2030

Additional Expected Loss in 2050

Impacts begin to materialize by 2030. By 2050 expected losses expand further under every scenario, most significantly under Fragmented World. Corporate equity and debt positions are more sensitive to climate scenarios than sovereign debt. About 15% of exposure lies in high physical risk areas and about 3% in high transition risk industries.

Select a life insurance climate analysis type

Extreme Temperatures Climate and Natural Disasters

Life Insurance Climate Physical Risk Scenario Analysis

Changes in policyholder mortality caused by extreme cold and extreme heat, and their impact on life insurance claim payments, are estimated to strengthen climate risk management and long-term financial stability.

Evaluation Process

STEP 1 Temperature–mortality correlation model

Parameters

24-hour mean daily temperatures from the Central Weather Administration (1951–2018)
Non-accidental deaths from the Ministry of the Interior (1995–2008)

STEP 2 Projecting mortality rates by scenario and period

Scenarios

SSP1-2.6, SSP2-4.5 and SSP5-8.5 scenarios
Causes of death: extreme cold and extreme heat
National Development Council population projections (2020–2050)
The Company's existing in-force policy data

STEP 3 Projecting claim payments by scenario and period

Results

Changes in claim payments by period under each scenario
Assessment of the results and formulation of response measures

Results

SSP1-2.6
SSP2-4.5
SSP5-8.5

Change in Mortality Rate

-16.9% -5.3% -24.6%

-5.3% -14.5% -4.7%

-8.8% -12.0% -8.2%

-13.1% -6.1% 5.4%

Change in Claim Payments

-20.3% -5.6% -32.6%

-5.7% -16.9% -5.0%

-9.7% -13.6% -9.0%

-15.1% -6.5% 5.1%

Change in Mortality Rate

2026–2030SSP1-2.6: -16.9% / SSP2-4.5: -5.3% / SSP5-8.5: -24.6%
2031–2040SSP1-2.6: -5.3% / SSP2-4.5: -14.5% / SSP5-8.5: -4.7%
2041–2050SSP1-2.6: -8.8% / SSP2-4.5: -12.0% / SSP5-8.5: -8.2%
2051–2060SSP1-2.6: -13.1% / SSP2-4.5: -6.1% / SSP5-8.5: 5.4%

Change in Claim Payments

2026–2030SSP1-2.6: -20.3% / SSP2-4.5: -5.6% / SSP5-8.5: -32.6%
2031–2040SSP1-2.6: -5.7% / SSP2-4.5: -16.9% / SSP5-8.5: -5.0%
2041–2050SSP1-2.6: -9.7% / SSP2-4.5: -13.6% / SSP5-8.5: -9.0%
2051–2060SSP1-2.6: -15.1% / SSP2-4.5: -6.5% / SSP5-8.5: 5.1%

Response Measures

Rising temperatures may place upward pressure on future insurance claim payments. KGI Life will continue to enhance policyholders' adaptability to extreme temperatures through insurance product design and related services, using spillover policies that combine health management with reward mechanisms.

Insurance Product Losses from Climate and Natural Disasters

Probable Maximum Loss (PML) was analyzed using Ministry of the Interior population statistics for 1958 to 2024 and Taiwan's natural disaster loss reports, based on the occurrence probability of each disaster return period.

Gross Probable Maximum Loss (Gross PML)

Unit: NT$

Disaster	2% (1 in 50)	1% (1 in 100)	0.4% (1 in 250)
Typhoon/Hurricane	269,512,942	336,045,650	380,345,877
Flood	21,238,146	267,744,564	510,264,361

Net Probable Maximum Loss (Net PML)

Unit: NT$

Disaster	2% (1 in 50)	1% (1 in 100)	0.4% (1 in 250)
Typhoon/Hurricane	177,887,774	218,288,344	248,807,996
Flood	17,080,116	209,691,980	399,202,570

In 2025, total insurance claims paid for natural disasters — typhoons, earthquakes and floods — amounted to NT$1.3 million. Considering the Company's asset base and size, the overall financial impact of both the probable maximum loss and actual claims paid remains manageable.

TCFD Report

2024 TCFD Report