EIOPA: Risk exposures of the EU insurance sector slightly reduced compared to July risk assessment

10 November 2020 — Cosmin CONCEATU
The European Insurance and Occupational Pensions Authority (EIOPA) published its updated Risk Dashboard based on the second quarter of 2020 Solvency II data, the results showing that the risk exposures of the European Union insurance sector slightly reduced, compared to July risk assessment.

"Insurers are particularly exposed to very high levels of macro risk, while market, credit, profitability and solvency risks decreased to medium level. However, the risk assessment does not account for the outbreak of the second wave of the pandemic," EIOPA mentions in its press release.

Other observations of the study include:
  • Gross Domestic Product (GDP) growth forecasts at the end of September show the strongest expected decline in the last quarter of 2020 and first recovery in the second quarter of 2021. The effects of the new wave of the pandemic might skew further downward GDP growth.
  • The stabilization of the financial markets at the end of the third quarter 2020 partially eased the challenging situation for European insurers: market and credit risk indicators have stabilised at the end of September 2020.
  • Profitability and solvency risks, decreased to medium level. SCR ratio for groups slightly improved from the first to second quarter of 2020, amid remaining at lower levels than in the last quarter of 2019.
  • Insurance risks remain at medium level, driven by general concerns over decrease in premium growth, and in some Member States over reserve adequacy.
  • While market perceptions exhibit a decreasing trend, they are still at medium level. Since June 2020, stocks of life and non-life insurance outperformed relative to the market.

Head to EIOPA's Risk Dashboard to find more aspects regarding COVID-19 impact over the European insurance markets and companies:

Source: eiopa.europa.eu

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