Today, the European Insurance and Occupational Pensions Authority (EIOPA) published its updated Risk Dashboard based on the second quarter 2018 data.
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.