Risk Dashboards - Previous Publications

Previous Publications

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Key observations:

The results of the April 2019 Risk Dashboard show that the risk exposure of the European Union insurance sector remains overall stable.

Macro risks continue at medium level. Low swap rates and recent downward revisions to Gross Domestic Product (GDP) growth and inflation forecasts remain a concern going forward. Credit and market risks remain at medium level amid slightly decreased bond spreads, stable portfolio exposures and broadly unchanged bond volatility. Profitability and solvency risks are stable, with overall unchanged profitability indicators compared to the second half of 2018 and end-2017. Median Solvency Capital Requirement (SCR) ratios are well above 100% for groups, life and non-life solo undertakings. Insurance risks increased to medium level due to a further increase in the catastrophe loss ratio. Market perceptions remain stable at medium level with insurance stocks slightly outperforming the overall market, a reduction in insurance groups' Credit Default Swap (CDS) spreads and unchanged external ratings.

 

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 2018. This data is based on financial stability and prudential reporting collected from 96 insurance groups and 2,873 solo insurance undertakings.

Note:
  • Reference date for company data is Q4-2018 for quarterly indicators and 2017-YE for annual indicators. The cut-off date for most market indicators is mid-March 2019.
  • 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.

EIOPA Risk Dashboard – April 2019

 

Risk Dashboard – Third quarter 2018

Risks Level Trend
1.     Macro risks Medium constant
2.     Credit risks Medium constant
3.     Market risks Medium constant           
4.     Liquidity and funding risks Medium increase
5.     Profitability and solvency Medium constant
6.     Interlinkages and imbalances Medium increase
7.     Insurance (underwriting) risks Low increase
Market perceptions Level Trend
8.     Market perceptions Medium constant

 

Key observations:

The results of the third quarter 2018 show that the risk exposure of the European Union insurance sector remains broadly stable. Given the ongoing reduction in the accommodative stance of monetary policy, macro risks stand at medium level. However, further downward revisions of economic growth forecasts remain a concern going forward. Credit and market risks continue at medium level, with Credit Default Swaps (CDS) spreads for corporate bonds as well as equity market volatility increasing since September. Interlinkages and imbalances risks increased due to an increase in intrasectoral exposures, that can be explained by corporate actions and Mergers and Acquisitions (M&A) activities by some insurance groups. Insurance risks also increased following the impact on (re)insurers loss ratios of the natural catastrophes observed in 2018Q3, but remain at low level. Underpricing and underreserving driven by competition could be a concern for some lines of business. Market perceptions are stable at medium level, with insurance stocks outperforming the market in spite of a general deterioration in equity market performance. Insurers' price-to-earnings ratios went slightly down, while CDS spreads slightly increased.

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 third quarter of 2018. This data is based on financial stability and prudential reporting collected from 96 insurance groups and 2,906 solo insurance undertakings.

Note:
  • Reference date for company data is Q3-2018 for quarterly indicators and 2017-YE for annual indicators. The cut-off date for most market indicators is beginning of January 2019.
  • 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.

EIOPA Risk Dashboard – January 2019

 

Risk Dashboard – Second quarter 2018

Risks Level Trend
1.     Macro risks Medium constant
2.     Credit risks Medium constant
3.     Market risks Medium constant           
4.     Liquidity and funding risks Medium increase
5.     Profitability and solvency Medium constant
6.     Interlinkages and imbalances Medium constant
7.     Insurance (underwriting) risks Low constant
Market perceptions Level Trend
8.     Market perceptions Medium constant

 

Key observations:

The results of the second quarter 2018 show that the risk exposure of the European Union insurance sector remains stable overall. Macro risks continue at medium level amid continued economic recovery and less expansionary monetary policy. A potential future deterioration in the assessment due to political and international trade tensions cannot be excluded. Bond market volatility declined since June and overall Credit Default Swap (CDS) spreads remained broadly stable at low levels despite adverse developments in sovereign bond markets in some countries. Liquidity and funding risks increased due to a higher average coupon-to-maturity ratio of a limited number of bond issuances. Profitability has been overall stable and Solvency Capital Requirement (SCR) ratios are above 100% for most insurers.Market perceptions were mixed with insurance stocks outperforming the market, but at the same time concerns increased as regards the market mispricing of risks.

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 second quarter of 2018. This data is based on financial stability and prudential reporting collected from 98 insurance groups and 2,904 solo insurance undertakings.

Note:

  • Reference date for company data is Q2-2018 for quarterly indicators and 2017-YE for annual indicators. The cut-off date for most market indicators is mid-September 2018. Any market movements and potential losses from natural catastrophes occurred after the indicated cut-off dates are not yet reflected in the risk assessment.
  • 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.

EIOPA Risk Dashboard – October 2018

 

Risk Dashboard - First quarter 2018

Risks

Score Trend
1.     Macro risks Medium decrease
2.     Credit risks Medium constant
3.     Market risks Medium  increase          
4.     Liquidity and funding risks Medium constant
5.     Profitability and solvency Medium constant
6.     Interlinkages and imbalances Medium constant
7.     Insurance (underwriting) risks Low  large decrease
Market perceptions Score Trend
8.     Market perceptions Medium constant

 

Key observations:

The results of the first quarter 2018 show that the risk exposure of the insurance sector in the European Union remains stable overall with a decline in macro and insurance risks and an increasing trend in market risks. Persisting low yields and recent adverse developments such as increased protectionism should not be neglected, despite the improvement in recent economic data and the ongoing normalisation of monetary policy. Higher volatility in bond markets since March led to an increase in market risks, but these continue at a medium level. Credit risks also remain at a medium level, although spreads increased across all bond segments. Profitability and insurance risks benefited from the fading out of the impact of last year's natural catastrophes on (re)insurers' technical results. Median solvency ratios remain at satisfactory levels, though the reliance of some life insurers on transitional measures is high. Market perceptions were marked by an overall positive change in insurance groups' external rating outlooks, which was counterbalanced by an underperformance of insurance stocks relative to the overall market.

Note:

  • Reference date for company data is Q1-2018  for quarterly indicators and 2017-YE for annual indicators. The cut-off date for most market indicators is mid-June 2018
  • 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.

EIOPA Risk Dashboard – July 2018

 

 Risk Dashboard – Fourth quarter 2017

Risk categories Level Trend
1. Macro risks High Constant 
2. Credit risks Medium Constant 
3. Market risks Medium Constant
4. Liquidity and funding risks Medium Constant
5. Profitability and solvency Medium Constant
6. Interlinkages and imbalances Medium Constant
7. Insurance (underwriting) risks Medium
Constant
Market perceptions Level Trend
8. Market perceptions Medium
Constant

 

 

The results of the fourth quarter of 2017 show that the risk exposure of the insurance sector in the European Union remained stable. Despite positive macroeconomic developments, low interest rates are still a major source of risk for European insurers. Credit and market risks remained at a medium level. Spreads further decreased and concerns about potential risk mispricing remained. Volatility of equity prices increased and valuations are now slightly lower. Median profitability levels were broadly the same as in the fourth quarter of 2016 and solvency positions continued to be strong for both groups and solo companies. The impact of the natural catastrophes from the third quarter kept insurance risks at a medium level. Market perceptions were mixed, with insurers' stock prices outperforming the market, but at the same time there was a deterioration of the external rating outlook for some insurance groups.

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 2017. This data is based on financial stability and prudential reporting collected from 95 insurance groups and 2,930 solo insurance undertakings.

Note:

  • Reference date is Q4-2017 for quarterly indicators and 2016 YE for annual indicators. The cut-off date for most indicators based on market data is end-March 2018.
  • 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.
  • EIOPA Risk Dashboard – April 2018

 

Risk Dashboard – Third quarter 2017

 

Risk categories Level Trend
1. Macro risks High Constant 
2. Credit risks Medium Constant 
3. Market risks Medium Constant
4. Liquidity and funding risks Medium Constant
5. Profitability and solvency Medium Constant
6. Interlinkages and imbalances Medium Constant
​7. Insurance (underwriting) risks

Medium

Large Increase
Market perceptions Level Trend
8. Market perceptions Medium  Constant

 

Key observations:

 

The results of the third quarter 2017 show that the risk exposure of the insurance sector in the European Union remained overall stable. Despite positive macro and market trends, the risks linked to the low interest rates and to potential credit risk mispricing continued to be major concerns for the European insurance industry. Improvements in the solvency ratios were mainly driven by the increase in the eligible own funds. Some profitability and underwriting indicators deteriorated due to the impact of the recent natural catastrophes. Market perception remained stable with some improvements in the rating outlooks.

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 third quarter of 2017. This data is based on financial stability and prudential reporting collected from 97 insurance groups and 2,963 solo insurance undertakings.

 

Note:

  • Reference date for the quarterly data is Q3-2017 (data extracted on 05/01/2018), while the cut-off date for most other indicators is beginning of January 2018.
  • 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.
  • EIOPA Risk Dashboard – January 2018

Risk Dashboard – Second quarter 2017

Risk categories Level Trend
1. Macro risks High Constant 
2. Credit risks Medium Constant 
3. Market risks Medium Constant
4. Liquidity and funding risks Medium Constant
5. Profitability and solvency Medium Constant
6. Interlinkages and imbalances Medium Constant
7. Insurance (underwriting) risks Low Constant
Market perceptions Level Trend
8. Market perceptions Medium
Decrease


Key observations: 

The results of the second quarter 2017 show that the risk exposure of the insurance sector in the European Union remains overall stable with some slight improvements in the solvency ratios of groups and life solo undertakings. Profitability of the sector has shown some positive signs both for life and non-life. Inflation rate forecast is decreasing inverting the positive trend observed till March 2017, whereas unemployment rates continue to decrease. Despite some positive developments, 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 insurance industry. Recent natural catastrophe events have not yet been reflected in the data, therefore no impact on the industry is reflected at this stage. Market perception, driven by the outperformances of the insurance stocks and the reduction of the Credit Default Swap Spreads, improved. Ratings and rating outlooks remain stable. 

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 second quarter of 2017. This data is based on financial stability and prudential reporting collected from 93 insurance groups and 3,076 solo insurance undertakings.

Note:

 

  • Reference date for company data is Q2-2017 (data extracted on 26/09/2017), while the cut-off date for most other indicators is end-September 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.
  • EIOPA Risk Dashboard – October 2017

Risk Dashboard - First quarter 2017

Risk categories Level Trend
1. Macro risks High Constant 
2. Credit risks Medium Constant 
3. Market risks Medium Constant 
4. Liquidity and funding risks Medium Decrease
5. Profitability and solvency Medium Increase
6. Interlinkages and imbalances Medium Constant
7. Insurance (underwriting) risks Low Constant
Market perceptions Level Trend
8. Market perceptions Medium Constant 

 


The results show that the risk exposure of the insurance sector in the European Union remained overall stable in the first quarter 2017 with Solvency II ratios remaining strong and stable for groups whereas a slight deterioration has been observed particularly for solo non-life insurance undertakings. Volatility has decreased and global inflation rates are fluctuating near the 2% medium-term inflation target. 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 insurance industry. Nevertheless, market perception is relatively stable with some signs of improvement in the Credit Default Swap spreads.

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 first quarter of 2017. This data is based on financial stability and prudential reporting collected from 93 insurance groups and 3,076 solo insurance undertakings.


Note:

 

  • Reference date for company data is Q1-2017, while the cut-off date for most other indicators is end-June 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

 

 

EIOPA Risk Dashboard - July 2017

EIOPA Risk Dashboard - Background Note - July 2017


Risk Dashboard - May 2017

Risk categories Level Trend
1. Macro risks High Constant 
2. Credit risks Medium Constant 
3. Market risks Medium Decrease
4. Liquidity and funding risks Medium Constant
5. Profitability and solvency Medium Substantial Decrease
6. Interlinkages and imbalances Medium Constant
7. Insurance (underwriting) risks Low Constant
Market perceptions Level Trend
8. Market perceptions Medium Increase


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.

Note:

  • 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 theBackground Note


February 2017 Release

 

Risk categories Level Trend
1. Macro risks High Constant 
2. Credit risks Medium Constant 
3. Market risks High Constant 
4. Liquidity and funding risks Medium Decrease
5. Profitability and solvency Medium Constant
6. Interlinkages and imbalances Medium Constant
7. Insurance (underwriting) risks Low Constant
Market perceptions Level Trend
8. Market perceptions Medium Constant

Note:

  • Reference date for company data is Q3-2016, while the cut-off date for market-based data is end-December 2016.
  • 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

EIOPA Risk Dashboard - February 2017


​​​​​​​Date​Publication
​03.2016 ​EIOPA Risk Dashboard March 2016
​12.2015EIOPA Risk Dashboard December 2015 
​09.2015 EIOPA Risk Dashboard September 2015
​06.2015 ​EIOPA Risk Dashboard June 2015​​
​03.2015 EIOPA Risk Dashboard March 2015​
​12.2014

​​EIOPA Risk Dashboard December 2014

Eiopa Risk Dashboard December 2014 - Background Note

​09.2014EIOPA Risk Dashboard September 2014
06.2014 Eiopa Risk Dashboard June 2014
03.2014 Eiopa Risk Dashboard March 2014
Eiopa Risk Dashboard March 2014 - Background Note
12.2013 EIOPA Risk Dashboard December 2013 
09.2013 EIOPA Risk Dashboard September 2013
06.2013 EIOPA Risk Dashboard June 2013
EIOPA Risk Dashboard June 2013 – Background Note
03.2013 EIOPA Risk Dashboard March 2013
EIOPA Risk Dashboard March 2013 -Background Note
12.2012 EIOPA Risk Dashboard December 2012
10.2012 EIOPA Risk Dashboard September 2012