Exercise will look at how insurers cope with tough market and inflation
The European insurance super-regulator has launched the second Europe-wide stress test for the insurance sector.
The European Insurance and Occupational Pensions Authority (Eiopa) will carry out the exercise between now and the end of May, based on companies' 2010 financial results.
The aggregated results, which will cover a minimum of 50% of each European country’s insurance companies measured by gross premium income, are expected to be published in July.
The Swiss Financial Market Authority will also take part in the test.
The exercise is designed to look at how institutions cope under conditions of severe market deterioration or increased inflation, which forces central banks to increase interest rates.
The stress test is one of Eiopa's supervisory tools for assessing individual institutions’ strengths, including their capital positions, and evaluating the wider stability of the insurance sector.
The exercise will also help supervisors to understand the capital positions of insurers and insurance groups in adverse situations.
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