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 October 2019 (Q2-2019 Solvency II Data)
The results of the October 2019 Risk Dashboard show that the risk exposures of the European insurance sector remained overall stable compared to July. Macro and market risks continue at a high level. Downward revisions to Gross Domestic Product (GDP) growth and inflation forecasts and declines in swap rates for major currencies are adding further pressure to the sector. Volatility of the largest asset class – bonds – increased. Credit risks continue at a medium level, with somewhat lower Credit Default Swaps (CDS) spreads for most bond segments and broadly stable credit quality of asset portfolios. Nonetheless, signs of potential risk mispricing prevail. Profitability and solvency risks are also at a medium level. Half-yearly profitability indicators improved compared to the second quarter of 2018 due to higher profit and loss figures reported by some insurance groups. Solvency Capital Requirement (SCR) ratios for life undertakings declined. Interlinkages and imbalances show a decreasing trend due to a lower share of premiums ceded to reinsurers, but remain at a medium level. Market perceptions were marked by an underperformance of insurers' stocks compared to overall equity markets, whereas no change was observed in insurers' external ratings.
This Risk Dashboard based on Solvency II data summarises the main risks and vulnerabilities in the European insurance sector through a set of risk indicators of the second quarter of 2019. This data is based on financial stability and prudential reporting collected from 96 insurance groups and 2,852 solo insurance undertakings.
- Reference date for company data is Q2-2019 for quarterly indicators and 2018-YE for annual indicators. The cut-off date for most market indicators is mid-September 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 – October 2019
Previous Risk Dashboard Publications