EIOPA published its report on the 2018 Insurance Stress Test on 14 December. The stress test assessed the insurance industry’s resilience to shocks and catastrophes in the insurance market, with 42 (re)insurance groups, covering 75% of the market, taking part.
The results demonstrated that, even in the three extreme test scenarios, there were no concerns regarding the industry’s ability to pay claims as the sector is sufficiently capitalised to absorb shocks. EIOPA and national competent authorities plan to further analyse the results to obtain a deeper understanding of the risks and vulnerabilities of the sector and will issue recommendations on certain aspects where necessary.
Insurance Europe commented that it is pleased that the results of the stress test confirm the strength of Europe’s insurance industry and stated that Solvency II, the regulatory framework for the insurance industry, is already a comprehensive risk-based system with conservative capital requirements.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.