European insurers have sufficient financial strength, the chairman of the region’s supervisory authority for the industry said before the publication of stress-test results scheduled for next month.
The European Commission and the European Insurance and Occupational Pensions Authority, or Eiopa, along with local regulators, are developing a risk-based regulatory framework for the region’s insurers such as Allianz SE (ALV) and Axa SA. (CS) The new rules, named Solvency II, are scheduled for introduction in 2013. Insurers have been examined in a stress test this year based on the regulatory changes.
“The situation and solidity of insurers right now is very comfortable,” Gabriel Bernardino, Eiopa’s chairman, told journalists in Frankfurt yesterday. “That doesn’t mean some insurers won’t need to raise capital under the new regime where risk is at the center.”
The stress-test results from 221 insurers in 31 countries are being gathered by local regulators and Eiopa plans to publish aggregated results in July, according to Bernardino. The test include market risks as well as insurance-specific risks such as hits from major catastrophes, he said.
The current timetable for the introduction of Solvency II at the beginning of 2013 is “challenging” as some legislation still needs to be put in place, Bernardino said, adding that “there will certainly be transition periods in areas such as hybrid debt.”