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16 December 2021 General
EIOPA

(c) EIOPA

EIOPA, the European supervisory authority for pension funds and insurers, has just published the results of a stress test conducted earlier this year among 44 European insurers.

The purpose of the stress test is to reveal vulnerabilities in the insurance sector, and to assess the sector's resilience to adverse market conditions. The exercise examined sensitivity to a prolonged COVID-19 scenario in a "lower for longer" interest rate environment.

The capital component showed that European insurers are particularly sensitive to the market shocks under this scenario. The liquidity component was for the first time also included in this stress test.

An important consideration is that the EIOPA exercise does not take into account vulnerabilities resulting from the low interest rate environment in the medium term. It is therefore still important that insurers take into account the low interest rate environment, and the sustainability of their capital position in the medium term in their capital and dividend policy.

More information

2021 Insurance Stress Test report

2.3MB PDF
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