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Daily Insurance Industry News
Sunday 25th of February 2018
July 5, 2011

Stress tested European insurers “robust”

by Gill Montia

Story link: Stress tested European insurers “robust”

The European Insurance and Occupational Pensions Authority (EIOPA) has announced the results of its second European insurance stress test and confirmed that the insurance market covered is “robust”.

Between March and May, EIOPA tested insurers’ ability to meet the future Solvency II minimum capital requirements under a number of stress scenarios.

It also performed a supplementary test to evaluate sovereign bond exposures.

While the results indicate that, overall, the European insurance market is well prepared for potential future shocks, around 10% of firms did not meet minimum capital requirements under the “adverse” stress scenario.

Participating insurers showed an aggregate solvency surplus of €425 billion as at 31st December 2010, falling to €275 billion when the “adverse” scenario was applied.

Meanwhile, results of the sovereign bond yields test showed that approximately 5% of the participating companies would not meet the minimum capital requirement, with the aggregate surplus of €425 billion decreasing to €392 billion in this particular scenario.

The exercise was completed by 221 insurance and reinsurance groups and companies, headquartered in the European Union, Iceland, Liechtenstein, Norway and Switzerland.

 

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