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Leading international insurance think tank, The Geneva Association, has announced the publication of its latest report for the ongoing financial stability discussions at the G20, Financial Stability Board and International Association of Insurance Supervisors (IAIS). The report also provides a number of policy recommendations to strengthen the international resolution regimes further.
At the heart of the research was the need to understand better the current and existing resolution measures in insurance and how they relate to systemic risk.
When analysing the potential of systemic risk originating in the insurance industry, the IAIS has concluded that size and spread of global insurance activity is not a decisive indicator for systemic risk, and that the interconnectedness between the insurance industry and the banking industry is relatively limited. However, it also concluded that there is a need for a better understanding of the mechanisms involved in an insurance failure and the supervisory actions available, should an internationally-operating insurer start failing. The Geneva Association has therefore provided a strong focus of its research in this particular area.