1 in 10 European Insurers fail stress test

According to the European Insurance and Occupational Pensions Authority one in 10 European insurers would not be capable of meeting minimum capital requirements should we be faced with another financial crisis. 

 

According to the European Insurance and Occupational Pensions Authority one in 10 European insurers would not be capable of meeting minimum capital requirements should we be faced with another financial crisis.

A solvency deficit of nearly £4bn was discovered when these companies were subjected to the authority’s tests. One of the current concerns  - sovereign bond exposure - was covered separately by the EIOPA and was found to cause 5 per cent of participating groups to fall short of the MCR requirements.

The EIOPA stresses that, overall, the European insurance market is “well prepared for potential future shocks” and that the second round of tests are not necessarily indicative of any current solvency problems.

National Supervisory Authorities will discuss the results of the stress test with individual companies, which have not been named, over the coming months.

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