European insurance stress test results
Published: 4 July 2011
Last updated: 14 February 2019
Document number: 29/2011
The European Insurance and Occupational Pensions Authority (EIOPA) announced today the results of its second European insurance stress test. The exercise confirms that the insurance market in Europe covered by the test is robust.
Insurance and reinsurance groups and insurance companies headquartered in the European Union, Norway, Liechtenstein, Iceland and Switzerland, participated in the exercise. EIOPA publishes aggregate results for the whole market only.
Main results
- European insurers remain robust overall
- 10% of insurers would fail minimum capital requirements under the adverse stress scenarios. However, these insurers’ solvency deficit is modest compared with overall capital in the insurance industry
- Main risk drivers are equity prices, interest rates and sovereign bonds
- Main insurance risks are increased claims inflation and natural disasters
EIOPA aimed to include at least 50% of the insurance market of each country as measured by gross premium income. The largest Norwegian insurance companies/groups participated in the exercise. The stress test of the Norwegian insurance market was conducted by Finanstilsynet.
About the stress tests
Between March and May, EIOPA tested insurers’ ability to meet the future Solvency II Minimum Capital Requirements (MCR), the ultimate regulatory threshold, under a number of stress scenarios. The exercise, employing the same asset and liability valuation principles as in Quantitative Impact Study 5 (QIS5), and otherwise based on insurers’ end-2010 balance sheet values, was conducted in conjunction with the National Supervisory Authorities in the participating countries. It should be noted that measurement methodology under Solvency II is still under preparation. The Solvency II framework comes into force in 2013.
For more information about the stress tests, see EIOPA’s webpages: