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Regulatory and supervisory stress tests have become a central tool through which climate scenarios are translated into financial risk assessments in the (re)insurance sectors. Yet despite increasing technical sophistication, and in the context of recently updated supervisory expectations such as the Bank of England Prudential Regulation Authority’s supervisory statement (SS5/25) on climate-related risk management, there is growing concern that these practices may not meaningfully improve organisational resilience or decision-making at the board and executive level. Much of the focus remains on the precise quantification of individual hazards, while systemic, compounding, and strategic climate risks remain underexplored. This raises a critical question: are prevailing climate risk frameworks optimising measurement at the expense of genuine resilience?We argue that prevailing regulatory approaches to climate risk assessment have narrowed how risk is conceptualised and communicated. Physical risk scenarios typically isolate single peril–region combinations, while transition and litigation risks are assessed independently, obscuring the potential for interacting and cascading impacts. Moreover, the technical complexity of probabilistic modelling can limit accessibility for senior decision-makers, hindering effective governance and long-term strategic planning.We propose a layered climate risk storyline framework that complements existing quantitative models. Rather than relying on fully probabilistic compounding, the approach uses coherent storylines to explore how physical, transition, litigation, exposure, and Earth-system risks may interact and amplify impacts under plausible climate futures. This enables the examination of complex and systemic risk dynamics while remaining transparent and interpretable for senior decision-makers.We suggest that storyline-based, compounding risk frameworks offer a more effective bridge between climate science, catastrophe modelling, and strategic decision-making, shifting the focus from precise loss estimation toward resilience. Positioned alongside national climate services and national climate scenario products, this approach highlights the need for closer collaboration between academia, climate scientists, and practitioners to develop scenario frameworks capable of supporting more robust climate resilience in regulated financial sectors.