The European Insurance and Occupational Pensions Authority (EIOPA) has conducted a stress test among insurance undertakings throughout Europe, including nine Austrian insurances undertakings with a total market share of 80 percent. In addition, the FMA has also conducted a national stress test for all Austrian insurance and reinsurance undertakings as well as insurances groups. The international benchmarking exercise shows that Austria’s insurance undertakings have approached their calculation of capital requirements conservatively. At the same time, it has also confirmed that the low interest environment presents a substantial challenge for the undertakings and that the measures taken by the FMA have been effective. The results of the European stress test have also shown that life assurance providers with a high proportion of existing contracts with high yields would in particular experience a heavy erosion of own funds in the stress scenario.<\/p>
The EIOPA stress test’s goal was to promptly recognise the sensitivities and vulnerabilities of insurance undertakings. To achieve this goal, the effects of a “double hit” scenario and of a low interest rate scenario upon life assurance providers were tested. In the case of the “double hit” scenario, both sides of the balance sheet were placed under stress due to losses to asset prices and a reduction in interest rates. In the case of the low interest rate scenario, it was assumed that the interest rate curve would be flatter than currently forecast.<\/p>
In particular, the analysis of the effects of a sustained low interest environment once again demonstrated the inherent discrepancy between guaranteed returns and the sustainably realisable returns under the assumed prevailing conditions and confirmed the necessity of the FMA’s most recent measures in relation to classical life assurance, in particular cutting the maximum permissible assumed interest rate (to 0.5 percent as of 1 January 2017) and the obligation to form additional interest provisions.<\/p>
Journalists may address further enquiries to:<\/span><\/p> Tiemon Kiesenhofer, MBA The European Insurance and Occupational Pensions Authority (EIOPA) has conducted a stress test among insurance undertakings throughout Europe.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[80],"tags":[],"class_list":["post-12638","post","type-post","status-publish","format-standard","hentry","category-press-release"],"yoast_head":"\n
\n+43\/(0)1\/24959-6010
\n+43\/(0)676\/882 49 610<\/p>\n","protected":false},"excerpt":{"rendered":"