The European Insurance and Occupational Pensions Authority or EIOPA Sunday released results of its "stress test" which showed that the insurance sector is more vulnerable to a "double hit" stress scenario that combines decreases in asset values with a lower risk free rate.
The results revealed the insurance sector is in general sufficiently capitalized in Solvency II terms. Fourteen percent of companies, representing 3 percent of total assets, have a Solvency Capital Requirement or SCR ratio below 100 percent.
In a prolonged low yield scenario, 24 percent of insurers will not meet their SCR and some companies may face problems in meeting their promises in 8-11 years' time.
As a follow up to the stress test, the EIOPA issued a set of recommendations to NSAs to address the identified vulnerabilities in a coordinated way.
"NSAs are recommended to engage with companies to ensure that they have a clear understanding of their risk exposures and their vulnerability to given stress scenarios and that they have the capacity to take recovery actions if those vulnerabilities materialise," a statement from EIOPA said.
For comments and feedback contact: editorial@rttnews.com
May 01, 2026 15:54 ET Central banks dominated the economics news flow this week with almost all major ones announcing their latest policy decisions and many boosted expectations for a rate hike in June. In other news, several countries released the preliminary data for first quarter economic growth. In the U.S., comments by Fed Chair Jerome Powell were also in focus as his term ends this month.