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The second Europe-wide stress-test for the insurance sector was launched

On 23 March, 2011 the European Insurance and Occupational Pensions Authority (EIOPA) has launched the second Europe-wide stress-test for the insurance sector. The stress test is conducted in cooperation with the respective national supervisory authorities and will be concluded by the end of May, based on 2010 financial results. EIOPA will publish the aggregated results of the test in July 2011. The test is targeted towards the European insurance sector and will include a minimum of 50% of insurance companies per country measured by gross premium income. The Swiss Financial Market Authority (Finma) has decided to join the stress test in addition to member states of the European Union and European Economic Area (EEA).

To carry out this stress-test, EIOPA considered the macroeconomic assumptions that were applied to the banking stress test, in particular the assumptions underlying the macroeconomic adverse scenario provided by the European Central Bank. EIOPA further enhanced the definitions of those stress scenarios to address the actual market environment of the insurance industry.

Stress tests are a regular supervisory tool and the execution of periodic exercises is set down in EIOPA’s regulation, which defines EIOPA’s composition, powers, tasks and decision making process.