European insurers well capitalized despite losses
Thursday, 12 28 2017, Category: Insurance and Reinsurance, Country: Europe
The insurance sector remains well capitalised with a Solvency Capital Requirement (SCR) ratio for the median company above 200% despite the above average 2017 hurricane season having dealt a blow to firms’ profitability, according to the European Insurance and Occupational Pensions Authority’s (EIOPA) December 2017 Financial Stability Report.
The report found that in many cases the diverse SCR ratios within the European Economic Area and the use of long-term guarantees (LTG) and transitional measures create a cumulative effect on SCR ratios “providing a financial stability cushion and potentially acting in a counter cyclical manner.”
However, in the reinsurance sector, the 2017 hurricane season may add to rising claims towards the end of the year and this could eventually affect profitability and solvency levels of undertakings.