The European Insurance and Occupational Pensions Authority (EIOPA) published its July 2020 Financial Stability Report of the (re)insurance and occupational pensions sectors in the European Economic Area.
During the last months, the Covid-19 outbreak further proved the importance of the Solvency II regulatory framework. The market-consistent and risk based approach helped insurers to better align capital to risk, build-up resilience and enhance the risk management practices, while the adjustments included for long-term guarantees allowed to partially mitigate market volatility caused by COVID-19. As of year-end 2019 the insurance sector had a solid and comfortable capital buffer (median SCR ratio of 213%) which helped insurers to withstand the initial severe market shocks experienced with the Covid-19 crisis. However, a high level of uncertainty on the magnitude of economic disruption increases downside risks going forward.
Read more at EIOPA’s website.