European insurance sector displays resilience despite high macro and market risks

Written by Adam Cadle

07/02/2023

The European insurance sector is displaying an overall resilience despite high macro and market risks, EIOPA’s latest Risk Dashboard based on Solvency II data from Q3 2022 has revealed.

Macro risks remain a key source of concern amid a further decrease in global GDP growth expectations and high CPI forecast for the main geographical areas, EIOPA stated, even as unemployment remains low. Market risks are also at a high level, with volatility in bond and equity markets continuing to top last year’s average.

Profitability and solvency risks remain unchanged. Life insurers reported a decrease in their SCR ratio for the second consecutive quarter (from 241% to 223%), while the SCR ratio of non-life insurers edged up slightly from 215% to 221%.

On climate risks, insurers maintained their relative exposure to green bonds, while the ratio of their investments in green bonds over the total green bond outstanding slightly decreased. The growth of green bonds in insurers’ portfolios has decreased, while the growth of green bonds outstanding is stable.

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