EU insurance risks stable; potential risks stemming from real estate sector
Written by Adam Cadle
14/05/2024
Risks in the EU insurance sector are stable and overall at a medium level, with pockets of vulnerabilities stemming from market uncertainty and potential risks in the real estate sector, EIOPA’s latest Insurance Risk Dashboard has revealed.
Concerning macro risks, while some forward-looking indications have eased and point to positive developments, GDP growth remains relatively low by historical standards. Credit risks are steady following a slight decrease in credit default swaps spreads. Market risks pose challenges driven by market volatility and declining commercial real estate prices in H1 2023.
Liquidity and funding risks remain stable at a medium level, yet lapse rates have increased at the end of last year and are being closely monitored. Profitability and solvency risks are also stable at a medium level, with improved returns in end-2023 compared to 2022 and overall stable solvency ratios in Q4 2023 compared to previous quarters of 2023.
ESG-related risks are also stable with “no signs of relevant changes in the indicators monitoring transition and physical risks”, EIOPA stated.
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