A supervisory snapshot of the life insurance market in Europe to assess vulnerabilities and resilience to severe market developments – not a pass or fail exercise
Focus on two major market risks: A “low-for-long-yield” and a “double hit” scenario
236 insurance undertakings at solo level from 30 European countries participated
In the pre-stress situation participating undertakings appear adequately capitalized on an aggregate basis
Impact of stress scenarios shows that the low interest rate environment and a pronounced reassessment of risk premia pose a significant challenge for European insurance undertakings
“Double-hit” scenario to have a negative impact on the undertakings balance-sheet of 160 billion euros and “low-for-long” an impact of 100 billion euros
Revealed vulnerabilities require a coordinated supervisory response
When the viability of the business model is at risk, EIOPA recommends National Supervisory Authorities (NSA’s) to consider requesting the cancellation or deferral of dividend distribution
Click here to access the full press release.
Other Links
2016 EIOPA Insurance Stress Test Report
Recommendations of 2016 EIOPA’s Insurance Stress Test
