Estonian insurance companies are participating in the EU-wide stress test
The European Insurance and Occupational Pensions Authority (EIOPA) is conducting an EU-wide stress test for the insurance companies in cooperation with the national supervisory authorities from May to December. The aim of this exercise is to assess insurers’ sustainability in the low interest rate environment.
The insurance companies in Estonia participating in the stress test are AS SEB Elu- ja Pensionikindlustus, Compensa Life Vienna Insurance Group SE and Swedbank Life Insurance SE, i.e. insurers who have long-term contractual liabilities to their customers.
Andres Kurgpõld, the Member of the Management Board of the Financial Supervision Authority responsible for prudential supervision, said that stress tests are necessary because the supervisory authority can map important risks and draw insurance companies’ attention to those risks. If necessary, appropriate supervisory measures can be taken based on the stress test.
EIOPA, whose responsibilities include monitoring the financial stability of the European insurance market, carries out stress tests in every two years. Stress tests help to assess the vulnerabilities of insurers in adverse market developments.
The stress test report will be made public at the end of the year. As a results of the testing EIOPA may issue guidelines that the national supervisory authorities can impose upon those insurance companies who do not pass the test.