The Risk Dashboard presents EIOPA's quarterly risk assessment of the European Union insurance industry. With the implementation of the Solvency II regime in January 2016 substantial improvements as regards the risks' quantification and the reporting standards were introduced. The enhanced data of all (re)insurance undertakings subject to the Solvency II regime is the basis of the newly developed and improved analytical Risk Dashboard.
Risk Dashboard - May 2017
|1. Macro risks||
|2. Credit risks||
|3. Market risks||
|4. Liquidity and funding risks||
|5. Profitability and solvency||
|6. Interlinkages and imbalances||
|7. Insurance (underwriting) risks||
|8. Market perceptions||
The results show the risk exposure of the insurance sector remained overall stable and some positive market developments were identified. Solvency II ratios are stronger due to higher market values of assets and the increase of the risk free curve used for discounting the technical provisions. Volatility has decreased and inflation rates have slowly started to converge to desired target levels.
Despite these positive signs, the continuing low-yield environment and the observation that market fundamentals might not properly reflect the underlying credit risk, are still important concerns for the European Union insurance industry. This is also reflected in the slightly deteriorating market perception and the recent underperformance of insurance stock prices.
This Risk Dashboard based on Solvency II data summarises the main risks and vulnerabilities in the European Union insurance sector through a set of risk indicators of the fourth quarter of 2016. This data is based on financial stability and prudential reporting collected from 93 insurance groups and 3,076 solo insurance undertakings.
- Reference date for company data is Q4-2016, while the cut-off date for market-based data is end-March 2017.
- Risk Levels are based on a 4-level scale from Low (green) to Very high (red). Risk trend reports the quarter on quarter variation of the risk based on a 5-level scale from Substantial Decrease to Large Increase. For a thorough description of the methodology and of the presentation refer to the Background Note