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Key observations:
- Risk exposures for the insurance sector remained stable in Q4 2017.
- Despite positive macroeconomic developments, low interest rates continue to represent a major source of risk for insurers.
- Credit risk and market risk are still at a medium level. Spreads further decreased and concerns about potential risk mispricing remained. Volatility of equity prices increased and valuations are now slightly lower.
- Median figures for all profitability indicators are broadly at the same level as in Q4 2016. Solvency positions continued to be strong for both groups and solo companies.
- The impact of the natural catastrophes observed in Q3 2017 keeps insurance risks at a medium level.
- Market perceptions were mixed, with insurers’ stock prices outperforming the market but at the same time a deterioration of the external rating outlook for some insurance groups.