Conducting of a second stress-test on the European insurance market

The launch of the second Europe-wide stress-test for the insurance sector is prepared on request of the EU Economic and Financial Committee (EFC), which will be conducted by the European Insurance and Occupational Pensions Authority (EIOPA). The stress test will be conducted in cooperation with the European Systemic Risk Board (ESRB) and the respective national supervisory authorities, and it is expected to be launched in the beginning of the second quarter of 2011. The purpose of the stress-test will be determination and quality assessment of the impact of various stress scenarios on the financial situation of the insurers in the conditions of adverse and difficult economic environment.
The test will be targeted at the European insurance sector and will include a minimum of 50% of insurance companies per country measured by gross premium income. The first stress-test covered only the thirty biggest European insurance groups. Currently, EIOPA is preparing a stress test proposal including the scope of the exercise, framework and economic scenarios under which the insurers’ capital positions will be tested. Before defining the final framework of the stress-test, EIOPA will seek the cooperation of the national supervisory authorities and the insurers associations.