Featured Product

    EIOPA Updates Risk Dashboard in August 2020

    August 17, 2020

    EIOPA updated its risk dashboard based on Solvency II data for the first quarter of 2020. The dashboard summarizes key risks and vulnerabilities in the insurance sector in EU through a set of risk indicators. Solvency II data is based on financial stability and prudential reports collected from 81 insurance groups and 2,488 solo insurance undertakings. The results show that risk exposures of the insurance sector in EU remain generally high compared to April, as a result of the COVID-19 outbreak. The pandemic continued to cause disruptions in all financial sectors and economic activities, with insurers being particularly exposed to very high levels of macro risk. Market, credit, and profitability and solvency risks are also at a high level.

    Credit risk remains high, as the risk of credit events remains elevated going forward. Profitability and solvency risks also remain high.  and the expected deterioration, subsequent to the COVID-19 impact, is already reflected in some indicators. Asset over liabilities and Solvency Capital Requirement (SCR) ratios for groups and non-life solo registered a weakening. Asset over liabilities and SCR ratios for groups and non-life solo registered a weakening. Furthermore, the break in the sample due to the Brexit withdrawal agreement might distort a larger deterioration for some indicators. The unforeseen increase observed in the SCR life solo is principally driven by the adjustment in the sample after excluding UK companies. Moreover, a positive impact in the SCR life ratio was reported for some specific undertakings due to the increase in the volatility adjustment (VA). A further deterioration for next quarter is still foreseen for SCR ratios, both life and non-life, mainly driven by the low yield environment and possible depreciation of assets in the context of the COVID-19 shock. 

    Insurance risks decreased to medium level. On one hand, year-on-year premium growth for life undertakings significantly declined indicating already a negative impact from the COVID-19 outbreak. On the other hand, year-on-year premium growth for non-life undertakings and loss ratio show a slight improvement. Catastrophe loss ratio continues to increase following the significant events that occurred during 2019 and 2020—namely, the Australian bushfire season.  Market perceptions remained stable at a medium level. Stocks of life and non-life insurance undertakings continued to underperform relative to the market, which, in contrast, experienced an unexpected increase. Insurers’ Credit Default Swap (CDS) spreads returned to lower level, with insurers’ external outlooks showing a net increase in negative revision as of June 2020.

    Some indicators used in this risk dashboard do not still completely capture the latest development in the context of the COVID-19 outbreak; however, the expected deterioration of the relevant indicators reflecting all available information in a forward-looking perspective has been considered in the assigned risk levels, where possible. Expert judgment has been applied in credit and profitability and solvency risk categories. 


    Related Links

    Keywords: Europe, EU, Insurance, Solvency II, Risk Dashboard, Credit Risk, COVID-19, SCR, Market Risk, Solvency Risk, EIOPA 

    Featured Experts
    Related Articles
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697