12 April 2017Insurance

Regulator launches 2017 UK insurance stress test

The UK’s Prudential Regulatory Authority (PRA) has sent a request to the country’s largest general insurers to provide information about the impact of a range of stress tests on their projected Own Funds, as well as providing additional information on their sectoral exposures to the UK economy.

The General Insurance Stress Test 2017 includes a set of five severe but conceivable scenarios, namely four natural catastrophe scenarios and one economic downturn scenario consistent with the Banking Stress Test.

The natural catastrophes against which the insurers will be tested include severe windstorms across the South East of the United Kingdom and Northern Europe combined with two floods in the United Kingdom, a magnitude 9 earthquake along the Cascadia subduction zone in the Pacific North West leading to a tsunami as well as a series of three US Hurricanes of category 3 and 4 across the Caribbean, Gulf of Mexico and making landfall in continental United States.

The economic downturn scenario is based on an asset shock and economic downturn and also explicitly considers a reserving deterioration based on increased claims inflation.

The test captures the exposures that will allow the PRA to better understand the impact of potential losses by various sectors of the economy.

Submission of the completed Excel template by the participating firms is requested by 17:00 on Friday 14 July 2017.

Today’s top stories

Paulson’s exit from AIG to remove leading split advocate, according to analysts

AXIS Re hires senior exec from XL Catlin for Europe and MENA role

UK group risk market grows strongly in 2016: Swiss Re

AmTrust dismisses claims of FBI probe as share price plummets

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
16 December 2016   Insurance Europe, the European re/insurance federation, has said it feels the industry came through Solvency II stress tests carried out by the European Insurance and Occupational Pensions Authority (EIOPA) very well and is baffled by why EIOPA has made such a long list of recommendations following the tests.