EIOPA: European insurers’ risk levels remain broadly stable

The European Insurance and Occupational Pensions Authority (EIOPA) published recently its Risk Dashboard based on Solvency II data from the second quarter of 2021. The results show that insurers’ exposures to macro risks remain at a high level while all other risk categories, such as insurance as well as profitability and solvency risks, stay at medium levels. With regards to macro risks, inflation forecasts have been revised upwards. Unemployment rates are still elevated but on a decreasing trend. Financial markets stay broadly stable, amid fiscal and monetary support.

Overall profitability indicators and solvency positions for insurance groups continued improving in the second quarter of 2021, according to the report. Insurance risks continued at a medium level, with year-on-year premium growth for non-life and life undertakings increasing for the second consecutive quarter. Market perceptions remain at a medium level.

The environmental, social and goverance (ESG) related risks, included for the first time in the current Risk Dashboard, are at a medium level, with transaction and physical risks slightly improving. The catastrophe loss ratio decreased compared to the previous quarter, albeit not yet reflecting the potential negative impact of the European floods events in summer 2021.