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The low interest rate environment remains a key risk for the insurance sector. Credit risks continue at medium level with broadly stable Credit Default Swap (CDS) spreads for government and corporate bonds.
Profitability and solvency risks increased due to lower return on investments for life insurers observed in year-end 2018 data. Solvency Capital Requirement (SCR) ratios are above 100% for most undertakings in the sample even when excluding the impact of the transitional measures.
Market perceptions were marked by a performance of insurers' stocks broadly in line with overall equity markets, while median CDS spreads have slightly increased.
No change was observed in insurers' external ratings and rating outlooks.