A changing climate, and the eventual efforts of regulators (however reluctant) to deal with it, could have a big impact on insurers' balance sheets. Insurance companies that underwrite policies in flood-prone or wildfire-prone regions will face higher claims and stricter capital requirements. Some insurers may find it impossible to keep offering coverage in the riskiest zones, and be left with 'legacy exposures', policies written years ago that no longer reflect today's risk. Other industries could be affected by the economic damage caused by more extreme weather, storms, floods, heatwaves and droughts.

On the basis of the above passage, the following assumptions have been made:

1. Insurers and regulators need to be adequately prepared to face climate change.

2. Extreme weather events will reduce the economic growth of insurers and regulators in future.

3. Ignoring climate change is a huge risk for insurance companies.

Which of the above assumptions is/are valid?