Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • December 2013
12

European insurance and pensions firms proving 'resilient', says EIOPA

Open-access content Thursday 12th December 2013 — updated 5.13pm, Wednesday 29th April 2020

The risks facing the insurance and pensions sectors in the European Union have remained fairly stable since the summer, with profitability and solvency showing relative resilience, the regulator said today.

2

However, Gabriel Bernardino, chair of the European Insurance and Occupational Pensions Authority, urged the industry not be complacent and said latent risks could not be ignored.

'The main risks, namely, the low-yield environment, the weak macro-economic climate and credit risk from exposure to sovereigns and financial institutions remain mostly unchanged,' he wrote in his foreword to EIOPA's latest half-year financial stability report.

The report noted that low interest rates remained the most prominent risk, putting pressure on life insurers' and occupational pension funds' ability to pay guaranteed rates of return. This was not helped by fragile and deflationary economic conditions in many European countries, which last month prompted a further cut in eurozone interest rates.

In the insurance sector, weak macroeconomic growth and low yield continued to constrain sales and was pushing some firms to look outside their national boundaries, the report stated.

The global reinsurance sector, however, continued the robust growth and major losses from natural catastrophes compared favourably with previous years.

In the pensions sector, the report noted a shift away from defined benefit schemes towards defined contribution in many countries. The low interest rate environment also made it more difficult for DB schemes to meet the guaranteed return.

'To some extent pension fund can compensate for low yields by increasing the annual interest premium,' EIOPA said.

'These is, however, a risk that premium increased will reinforce the current trend of employers in the private sector closing down their defined benefit plans.'

In the foreword, Bernardino also highlighted the recent agreement on the Omnibus II Directive and the confirmation of the starting date for Solvency II of January 1 2016.

'There is much to do to be ready for this date and the area of financial stability analysis… We need to re-examine the metrics that we use for assessing risk exposures, resilience and other aspects of financial stability analysis,' said Bernardino.

'Solvency II will provide us with a rich source of information for stability analysis and I look forward to further developments in this area.'

This article appeared in our December 2013 issue of The Actuary.
Click here to view this issue
Filed in:
12
Topics:
General Insurance

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Senior Underwriting Risk Manager

London (Central)
£85K-£95K + Benefits
Reference
124386

Reserving Manager (Contract)

London (Central)
£1200 - £1400 per day
Reference
124385

Life Actuary - Contract - IFRS 17 Financial Impact

England, London / England, Bristol / North Yorkshire, England
£900 - £1150 per day
Reference
124384
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2022 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ