General Information & Client Service
  • Americas: +1.212.553.1653
  • Asia: +852.3551.3077
  • China: +86.10.6319.6580
  • EMEA: +44.20.7772.5454
  • Japan: +81.3.5408.4100
Media Relations
  • New York: +1.212.553.0376
  • London: +44.20.7772.5456
  • Hong Kong: +852.3758.1350
  • Tokyo: +813.5408.4110
  • Sydney: +61.2.9270.8141
  • Mexico City: +001.888.779.5833
  • Buenos Aires: +0800.666.3506
  • São Paulo: +0800.891.2518
December 07, 2017

PRA sent a letter to CEOs of firms that participated in the General Insurance Stress Test (GIST) exercise for 2017. The letter summarizes the PRA feedback and the key findings of this exercise, along with suggestions about potential areas for improvements that impact underwriting, finance, and risk functions. The Annex to this letter presents the detailed results of GIST 2017.

The letter states that, this year, submissions were of higher quality than in 2015, thus allowing PRA to provide a more detailed feedback. The key findings from GIST 2017 are as follows:

  • Resilience. The UK general insurance sector, in aggregate, and regulated firms, at an individual level, are resilient to the scenarios within the regulatory threshold of Solvency II.
  • Reinsurance interconnectedness. There is no evidence that the level of interconnectedness, reflected by the concentration to specific reinsurers, has increased. The results indicate that concentration to individual reinsurers has fallen marginally since 2015, with alternative capital remaining an important part of reinsurance panels.

The results will inform supervision, for instance where firms are identified as outliers or have results that appear inconsistent with their stated risk appetite or the output of their internal model. PRA is following up with these firms as part of its normal supervision. The next stress test exercise is anticipated in 2019. Stress testing remains a valuable tool for PRA in pursuing a forward-looking, proportionate, and judgment-based approach to supervision. It also helps the preparedness for when events do occur. For example, it helps in the timely identification of the firms most likely to suffer significant losses as a result of the recent North Atlantic hurricanes.         


Related Link:  PRA Letter and GIST Results (PDF)


Keywords: Europe, UK, Insurance, Solvency II, Stress Testing, GIST 2017, PRA

Related Insights

EBA Finalizes Guidelines on the STS Criteria in Securitization

EBA published the final guidelines that provide a harmonized interpretation of the criteria for a securitization to be eligible as simple, transparent, and standardized (STS) on a cross-sectoral basis throughout EU.

December 12, 2018 WebPage Regulatory News

OSFI Sets Domestic Stability Buffer for D-SIBs at 1.75%

OSFI set the level for the Domestic Stability Buffer at 1.75% of total risk-weighted assets, as calculated under the Capital Adequacy Requirements (CAR) Guideline.

December 12, 2018 WebPage Regulatory News

FSI Publishes Paper on Proportionality in Insurance Solvency Rules

FSI published a paper on proportionality in the application of insurance solvency requirements.

December 11, 2018 WebPage Regulatory News

BCBS Updates Framework for Pillar 3 Disclosure Requirements

BCBS published the updated framework for Pillar 3 disclosure requirements.

December 11, 2018 WebPage Regulatory News

EBA Issues Revised List of Validation Rules for Reporting

EBA revised the list of validation rules in its implementing technical standards on supervisory reporting.

December 11, 2018 WebPage Regulatory News

IMF Reports Assess the Stability of Financial System in Brazil

IMF published a report on the results of the Financial System Stability Assessment (FSSA) on Brazil.

December 11, 2018 WebPage Regulatory News

FED Governor Examines Pros of Imposing Capital Buffers on Large Banks

At the Peterson Institute for International Economics in Washington D.C., the FED Governor Lael Brainard summarized the financial stability outlook, highlighted areas where financial imbalances seem to be building, and touched on the related policy implications.

December 07, 2018 WebPage Regulatory News

US Agencies Propose Rule on Appraisals for Real Estate Transactions

US Agencies (FDIC, FED, and OCC) proposed a rule to increase the threshold level at or below which appraisals would not be required for the residential real estate transactions from USD 250,000 to USD 400,000. Comments will be accepted for 60 days from publication in the Federal Register.

December 07, 2018 WebPage Regulatory News

EBA Single Rulebook Q&A: First Update for December 2018

This week one answer was published as part of the Single Rulebook Questions and Answers (Q&A).

December 07, 2018 WebPage Regulatory News

FED Updates Reporting Form and Instructions for FR Y-14Q

FED published the updated reporting form FR Y-14Q for Capital Assessment and Stress Testing, along with the associated instructions.

December 06, 2018 WebPage Regulatory News
RESULTS 1 - 10 OF 2325