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The European Insurance and Occupational Pensions Authority (EIOPA) published today its Risk Dashboard based on Solvency II data from the third quarter of 2022. All other risk categories, such as profitability and solvency, climate as well as digitalisation and cyber risks stay at medium levels.
Macro risks remain a key source of concern amid a further decrease in global GDP growth expectations and high CPI forecasts for the main geographical areas, even as unemployment remains low. The weighted average of 10-year swap rates increased. Central banks continue the normalisation of their monetary policy.
Market risks are currently at a high level. Volatility in bond and equity markets continue to top last year’s average. Property prices remain at the same level. Insurers’ median exposure to bonds and equity remain relatively unchanged while median exposure to property slightly increased in Q2 2022. Credit risks remain relatively moderate. Credit default swap (CDS) spreads slightly increased for government and secured financial bonds, while slightly decreasing for unsecured financial and non-financial corporate bonds in the last quarter of 2022. Insurers’ relative exposure to non-financial corporate and financial secured bonds slightly decreased in Q3 2022, while exposure to sovereign and financial bonds remained broadly stable.
Profitability and solvency risks are unchanged. Life insurers reported a decrease in their solvency capital requirement (SCR) ratio for the second consecutive quarter, while the SCR ratio of non-life insurers edged up slightly.