EIOPA published its updated risk dashboard based on data for the third quarter of 2018. This data is based on financial stability and prudential reporting collected from 96 insurance groups and 2,906 solo insurance undertakings. The risk dashboard is based on Solvency II data and it summarizes the main risks and vulnerabilities in the insurance sector in EU through a set of risk indicators. The results of the third quarter 2018 show that, overall, the risk exposure of the EU insurance sector remains stable.
The dashboard highlights that credit, market, and liquidity and funding risks continue at a medium level, with Credit Default Swap spreads for corporate bonds as well as equity market volatility increasing since September. Profitability and solvency risks also remain stable at a medium level. The ratio of assets over liabilities and share of tier 1 own funds have both increased slightly. Median Solvency Capital Requirement (SCR) ratios for groups and non-life companies have improved while the SCR ratios for life companies have decreased. However, SCR ratios for all types of undertakings remain above 100%. Although insurance risks increased following the impact on (re)insurers' loss ratios of the natural catastrophes observed in the third quarter of 2018, they remain at a low level. Underpricing and underreserving driven by the competition could be a concern for some lines of business. Market perceptions are stable at the medium level, with insurance stocks outperforming the market despite a general deterioration in equity market performance.
Keywords: Europe, EU, Insurance, Risk Dashboard, Financial Stability, Solvency II, Credit Risk, Market Risk, Liquidity Risk, EIOPA
The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.
The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).
The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.
The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).
The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.
A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.
The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.
The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.
The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).
HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.