Risk Dashboards

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 – 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

Previous Risk Dashboard Publications

Previous Risk Dashboard publications are available here