July 24, 2018

EIOPA published its updated Risk Dashboard based on data for the first quarter of 2018. This Risk Dashboard is based on Solvency II data and summarizes the main risks and vulnerabilities in the insurance sector in EU through a set of risk indicators of the first quarter of 2018. This data is based on financial stability and prudential reporting collected from 93 insurance groups and 2,912 solo insurance undertakings. The dashboard shows broadly unchanged risk levels for the insurance sector in EU.

The results of the first quarter 2018 show that the risk exposure of the insurance sector in EU remains stable overall with a decline in macro and insurance risks and an increasing trend in market risks. Persisting low yields and recent adverse developments, such as increased protectionism, should not be neglected, despite the improvement in recent economic data and the ongoing normalization of monetary policy. Higher volatility in bond markets since March led to an increase in market risks, but these continue at a medium level. Credit risks also remain at a medium level, although spreads increased across all bond segments. Median solvency ratios remain at satisfactory levels, though the reliance of some life insurers on transitional measures is high. Market perceptions were marked by an overall positive change in insurance groups' external rating outlooks, which was counterbalanced by an underperformance of insurance stocks relative to the overall market.

 

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Keywords: Europe, EU, Insurance, Risk Dashboard, Solvency II, Data, Financial Stability, EIOPA