EIOPA: Risk Dashboard – March 2013

22 March 2013

EIOPA's Risk Dashboard, a common set of quantitative and qualitative indicators to identify and measure systemic risk, is published on a quarterly basis in cooperation with the ESAs and the ESRB.

The Risk Dashboard is based on mechanical aggregation of indicators and additional expert judgement if deemed necessary. Besides publicly available market data, extensive use is made of company data which is reported by 30 large and important insurance groups from the EEA and Switzerland under EIOPA’s quarterly fast-track reporting.

As part of the new European legislation, EIOPA as well as the other ESAs and the ESRB are called upon to “develop a common set of quantitative and qualitative indicators (risk dashboard) to identify and measure systemic risk”. The legislation further stipulates that these dashboards should be constructed in cooperation between the ESAs and ESRB. In response to this requirement, the ESAs, together with the ESRB and the ECB have determined a set of general features for all dashboards to follow:

• Each risk dashboard will be constructed based on the same set of risk categories: macro risk, credit risk, market risk, funding and liquidity risk, profitability and solvency risk and risks resulting from interlinkages and imbalances. Furthermore, each institution has the option to add categories to allow for sector specific risks (e.g. insurance risk).
• It was noted that all Risk Dashboards should be constructed on a flexible basis in order to allow each authority to reflect the most imminent risks identified.
• Further development and implementation of the Risk Dashboards should be taken forward individually by each of the authorities concerned. However, the ESAs and ESRB should continue to work together closely in this regard to ensure interplay regarding the underlying information presented e.g. consistency when the same indicator is used in different Risk Dashboards.

Within the common structure agreed upon by the ESAs, the ESRB and the ECB, the Risk Dashboard is designed to be flexible, so EIOPA can react quickly to upcoming risks which are deemed necessary to be covered. EIOPA expects the Dashboard gradually to evolve further, taking feedback by the addressees of this product into account.

Full risk dashboard

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