Today, the European Insurance and Occupational Pensions Authority (EIOPA) published its updated Risk Dashboard based on the first-quarter 2017 data.
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.
The Risk Dashboard is a quarterly publication summarising the main risks and vulnerabilities in the European Union insurance sector by using a set of indicators grouped into seven risk categories: macro risks, credit risks, market risks, liquidity and funding risks, profitability and solvency, interlinkages and imbalances and insurance (underwriting risks). An additional category "Market perceptions" gives the insight in how the insurance sector is perceived by financial markets. More information in the Background Note.
The data covered by the Risk Dashboard is based on the financial stability and prudential reporting of a sample of 93 insurance groups and 3,076 solo insurance undertakings.