The results show that insurers’ exposures to macro risks remain at a high level while all other risk categories, such as insurance as well as profitability and solvency risks stay at medium levels.
The European Insurance and Occupational Pensions Authority (EIOPA)
published today its Risk Dashboard based on Solvency II data from the
third quarter of 2021.
With regards to macro risks, inflation forecasts have been revised
upwards and the 10-year swap rates have increased across main
currencies. Unemployment rates are still elevated. Financial markets
stay broadly stable. Monetary policies remain accommodative although
asset purchases continue at a slower pace and are expected to decelerate
further .
After six quarters of increasing trend, solvency position for groups
decreased, but still remained above year end 2020 level. SCR ratio for
solo life undertakings slightly improved. Profitability indicators
reported a slight deterioration, with a rise in the net combined ratio
for non-life business.
Interlinkages and imbalances risks remain at a medium level.
Insurance groups’ exposure to banks decreased, while the median
investments in insurances and other financial institutions rose
slightly. Insurance risks remain at a medium level with year-on-year
premium growth for life insurance showing a slight deterioration.
Environmental, social and goverance (ESG) related risks are at a
medium level. The catastrophe loss ratio decreased slightly compared to
the previous quarter, albeit it may not yet reflect the potential
negative impact of the European floods events in summer 2021.
Digitalisation and cyber risks are at medium level. The materiality
of these risks for insurers as assessed by supervisors remains
contained. The frequency of cyber incidents impacting all sectors of
activity, as measured by available data, decreased since the same
quarter of last year, but it is still high compared to the long term
average. The indicators in this risk category are exploratory and will
be further developed as new data becomes available.
Background
This Risk Dashboard based on Solvency II data summarises the main
risks and vulnerabilities in the European Union insurance sector through
a set of risk indicators of the third quarter of 2021. The data is
based on financial stability and prudential reporting collected from 95
insurance groups and 2190 solo insurance undertakings.
EIOPA
© EIOPA
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