EIOPA Publishes Risk Dashboard for the Third Quarter of 2018
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.
Related Links
Keywords: Europe, EU, Insurance, Risk Dashboard, Financial Stability, Solvency II, Credit Risk, Market Risk, Liquidity Risk, EIOPA
Featured Experts
Adam Koursaris
Asset and liability management expert; capable modeler; risk and capital specialist
Cassandra Hannibal
Life insurance actuary; risk management and economic capital specialist
Jerome Ogrodzki
Insurance asset and liabilities modeling specialist; stochastic modeling expert
Related Articles
EBA Publishes Regulatory Standards to Identify Shadow Banking Entities
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
EU Agencies Update LCR Rule and Macro-Prudential Policy Recommendation
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
OSFI Discusses Benchmark Rate Transition, Sets Out Work Priorities
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
EBA Proposes Standards to Support Secondary NPL Markets
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
EBA Issues Standards for Crowdfunding Service Providers Under ECSPR
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.
EU to Amend Credit Risk Adjustment Rules; ESAs Submit Queries on SFDR
The European Council published a draft Commission Delegated Regulation to amend the regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
EU Confirms Agreement on Rules on Cybersecurity and Banking Resolution
The European Securities and Markets Authority (ESMA) published a paper that examines the systemic risk posed by increasing use of cloud services, along with the potential policy options to mitigate this risk.
MAS Amends Notice 635 and Issues Second Proposal on Green Taxonomy
The Monetary Authority of Singapore (MAS) published amendments to Notice 635, which sets out requirements that a bank in Singapore has to comply with when granting an unsecured non-card credit facility to individuals.
EC Consults on PSD2 and Open Finance; EU Reaches Agreement on DORA
The European Commission (EC) published a public consultation on the review of revised payment services directive (PSD2) and open finance.
