Featured Product

    NBB Publishes Results of Insurance Stress Test for 2019

    October 30, 2019

    NBB published a presentation on the results of the 2019 stress tests on insurance undertakings. Also published was the data on the seven Belgian insurance companies that have participated in all parts of the NBB insurance stress test for 2019. Overall, the results of the exercise reveal that the largest Belgian insurance companies are resilient toward increases in Belgian sovereign bond (OLO) spread. Most insurers have risk mitigation techniques in place to mitigate some of the impact (spread lock derivatives, retaining foreseeable dividends).

    In 2019, a significant part of the Belgian insurance sector was subject to a stress test consisting of two scenarios. The first scenario (Belgian Adverse) assessed the impact of a repricing of the Belgian sovereign debt on the solvency positions of insurers. The Belgian Adverse scenario consisted of three parts: 100 basis points increase of the OLO spread; 200 basis points increase of the OLO spread; and the Reverse stress, whereby the insurer has to determine the OLO spread increase at which its solvency ratio drops below 100%. The second scenario (Low Yield) assessed the impact of a continued decline in the risk-free rates on the solvency positions of insurers. The aim of the stress test was to assess the impact of OLO spread increase on the solvency of the largest Belgian insurers and to assess the functioning of the volatility adjustment mechanism, should an idiosyncratic OLO spread increase occur.

     

    Related Links

    Keywords: Europe, EU, Belgium, Insurance, Stress Testing, Adverse Scenario, Low Yield Scenario, Volatility Adjustment, Belgian Sovereign Bond, OLO, NBB

    Featured Experts
    Related Articles
    News

    ESAs Issue Multiple Regulatory Updates for Financial Sector Entities

    The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.

    November 15, 2022 WebPage Regulatory News
    News

    ISSB Makes Announcements at COP27; IASB to Propose IFRS 9 Amendments

    The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.

    November 10, 2022 WebPage Regulatory News
    News

    IOSCO Prioritizes Green Disclosures, Greenwashing, and Carbon Markets

    The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.

    November 09, 2022 WebPage Regulatory News
    News

    EBA Finalizes Methodology for Stress Tests, Issues Other Updates

    The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups

    November 09, 2022 WebPage Regulatory News
    News

    OSFI Sets Out Work Priorities and Reporting Updates for Banks

    The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.

    November 07, 2022 WebPage Regulatory News
    News

    APRA Finalizes Changes to Capital Framework, Issues Other Updates

    The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.

    November 03, 2022 WebPage Regulatory News
    News

    BIS Hub and Central Banks Conduct CBDC and DeFI Pilots

    The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.

    November 03, 2022 WebPage Regulatory News
    News

    ECB Sets Deadline for Banks to Meet Its Climate Risk Expectations

    The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.

    November 02, 2022 WebPage Regulatory News
    News

    ESAs, ECB, & EC Issue Multiple Regulatory Updates for Financial Sector

    Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)

    October 31, 2022 WebPage Regulatory News
    News

    EC Adopts Final Rules Under CRR, BRRD, and Crowdfunding Regulation

    The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)

    October 26, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8582