EIOPA: 2011 Solvency II-based stress tests
04 July 2011
EIOPA carried out latest stress tests on insurance companies based on the Solvency II rules where assets and liabilities are valued on a market consistent basis, and arrived at a positive outcome overall.
Shock scenarios developed by EIOPA to highlight risks of particular relevance to insurers, did not throw up any worrying outcome on the latest stress tests carried out by EIOPA on 221 (re-)insurance groups and companies in the EU.
The summary of the stress test outcome include:
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overall the European insurance sector remains robust in the occurrence of major shocks;
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90 per cent of the groups/undertakings tested continue to comply with the Minimum Capital Requirements, even in the most adverse scenario.
The main vulnerabilities identified:
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adverse developments in yield curves and sovereign bond markets;
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higher than expected rate of severe natural catastrophes combined with limited recourse to reinsurance facilities.
EIOPA will continue to monitor the evolution of markets and the main vulnerabilities identified. National supervisors are to discuss the main findings of the stress tests with insurance groups and undertakings.
The results of the stress tests are to be embedded in the individual plans and strategies to implement Solvency II.
© EIOPA
