Insurance Europe is 'puzzled' by the long list of supervisory actions recommended by EIOPA arising from its latest stress test report.
The body's deputy director general Olav Jones said "it is a core role of insurers to protect customers from risks such as these and the purpose of holding surplus capital in excess of liabilities is to allow insurers to absorb risks."
"Therefore, it is logical that under stress-test scenarios, insurers exposed to those risks will see their surplus assets reduced. This is not a vulnerability, it is the system working as it should, and Insurance Europe is puzzled by the long list of supervisory actions recommended. It is also important to view these results in the context of the additional layers of protection that arise from how Solvency II calculates liabilities, which can result in conservative measurements."
Insurance Europe said it is important to emphasise that "these stress tests were not a ‘pass or fail’ exercise."
The companies that took part in this exercise represent only 60% of the industry and the 40 per cent that was not covered includes non-life and unit-linked business that is unlikely to be impacted by low interest rates. As such, had the entire industry been included, the level of overall resilience shown would have been even higher.”