Europe’s insurers are able to withstand even a major financial crisis, an EU watchdog said yesterday, boosting industry hopes for less onerous regulation.
EU insurance watchdog CEIOPS unveiled the long-awaited results of its stress tests of how insurers would weather another financial market storm like that which followed the collapse of Lehman Brothers in 2008, or worse, saying the tests showed big groups could resist even severe downturns. European insurance trade body CEA seized on the findings as backing its view that regulators ought not to impose radically higher capital requirements on the sector.
“The results published today by CEIOPS confirm that the insurance sector is well capitalised, which is why it weathered the crisis overall remarkably well,” CEA deputy director General Alberto Corinti said in a statement.
Regulators and the European Commission are drawing up new rules, known as Solvency II, that will require insurers to more accurately match the amount of capital they hold with the risk on their books. The rules are due to come into force by 2013 but insurers fear they will have to hold too much capital, hitting profit margins.