EU insurers’ crypto assets to stay negligible if SII charge set at 100%, Fitch says

Written by Adam Cadle

10/04/2025

EU insurers are likely to keep their exposure to crypto assets minimal if proposals to set the Solvency II (SII) risk charge for such assets at 100% are adopted, Fitch Ratings has stated.

The European Insurance and Occupational Pensions Authority (EIOPA) recently recommended the stringent capital charge to reflect the volatility and risks associated with crypto assets.

EIOPA’s advice, requested by the European Commission, seeks to ensure prudent treatment of crypto assets within the SII framework. The lack of clear crypto asset classification under SII leads to them being categorised as either intangibles or type 2 equities (those not listed in regulated EEA or OECD markets).

Fitch estimated that even a small allocation of less than 1% into crypto assets could lead to a double-digit fall in an insurer’s SII ratio, depending on the charge that had been applied to the replaced asset class.

EU insurers already appear to have very little appetite for crypto assets. Direct exposure was just 0.0068% of sector assets at end-2023, according to EIOPA.

"We believe this reflects insurers’ concerns about the extreme price fluctuations, market manipulation and security issues associated with crypto assets," Fitch stated.

"Over 90% of crypto exposure was in Luxembourg and Sweden, where the investments are typically structured within funds, such as exchange-traded funds, and held on behalf of unit-linked policyholders. This means that the market risk is borne by the policyholders and does not affect SII ratios."

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