No UK firm failed a far reaching stress test of the European insurance industry, according to the ABI.
On Monday, the European Insurance and Occupational Pensions Authority (Eiopa) published the results of its stress test of the sector.
This showed that 10% of European insurers would not meet the minimum capital requirement (MCR) outlined in the Solvency II directive in the event of a severe macroeconomic deterioration.
It also showed that around 8% of companies and groups would not meet the MCR if inflation rises, pushing up interest rates.
The results of the tests have sparked concerns from analysts about the ndustry's robustness.
Responding to the Eiopa results, ABI Director of financial regulation and tax Peter Vipond said: “These results show the strength and stability of the UK insurance industry. As far as we are aware no UK firm failed this stress test.
“Many UK insurers have increased their capital buffers in preparation for the new Solvency II regime and hold enough reserves to meet their minimum capital requirements, even when tested under the most adverse economic scenarios.
“These results re-enforce the point that UK general and life insurers have robust capital reserves, and Solvency II must not push these up to a point where there is no added prudential benefit and customers suffer."
No comments yet