Developing scenarios for climate transition risks for the Own Risk and Solvency Assessment (ORSA) will become an important challenge for the industry. In August 2022, European Insurance and Occupational Pensions Authority (EIOPA) published application guidance. European insurers will be required to identify material climate change risks that affect their business and integrate these risks into their system of governance, risk management and ORSA. For this paper, we focus on transition risks, discussing the following: 

• The nature of transition risks
• Designing the process
• How to define scenarios
• Past prudential stress tests
• A practical illustration