EIOPA published the updated risk dashboard for the second quarter of 2019. The dashboard is based on the Solvency II data for the second quarter of 2019 and summarizes the key risks and vulnerabilities in the insurance sector in EU. The data used are based on financial stability and prudential reporting from 96 insurance groups and 2,852 solo insurance undertakings. Overall, the results show that risk exposures of the insurance sector in EU remains stable, compared to July 2019.
The results show that macro and market risks continue at a high level. The volatility of bonds, the largest asset class, also increased. Credit risks continue at a medium level, with somewhat lower Credit Default Swap spreads for most bond segments and broadly stable credit quality of asset portfolios. The signs of potential risk mispricing also prevail. No major changes have been observed in the credit quality of insurers’ investments. Profitability and solvency risks are also at a medium level. The results also show that the Solvency Capital Requirement, or SCR, ratios for both groups and non-life undertakings have remained broadly stable, though a decline across the whole distribution has been observed for life undertakings. Liquidity and funding risks continue to be at the medium level, with cash holdings and liquid assets ratio—the two liquidity indicators—remaining broadly stable.
Keywords: Europe, EU, Insurance, Reinsurers, Risk Dashboard, Solvency II, SCR, Market Risk, Credit Risk, EIOPA
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PRA published a statement that outlines its view on the implications of LIBOR transition for contracts in scope of the “Contractual Recognition of Bail-In” and “Stay in Resolution” parts of the PRA Rulebook.
PRA published the policy statement PS15/20 to reflect additional resilience associated with higher macro-prudential buffers in a standard risk environment with a reduction in Pillar 2A capital requirements.
BCBS published the eighteenth progress report on implementation of the Basel III regulatory framework in member jurisdictions.
FCA announced proposals that would provide continued support for certain consumer credit products to users, who are facing a financial impact because of the exceptional circumstances arising from the COVID-19 pandemic.
ACPR published a draft version of taxonomy RAN 1.4.0_PWD1, along with the related documentation, for Solvency II reporting.
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