Solvency II Stress Test

In recent weeks we have posted a couple of times about Solvency II topics and have included a post outlining the main aspects of the Solvency II initiative. Solvency II is also a great opportunity for employees and consultants to update their skills and knowledge and on the post about Solvency II for programme and project managers we outlined some of the opportunities that now exist.

Solvency II – a new regulator

Europe now has a newly founded insurance regulator, the European Insurance and Occupational Pensions Authority (EIOPA), Based in Frankfurt, Germany, it has recently announced plans to launch the second Europe-wide stress test for the insurance sector at the beginning of the second quarter.

Solvency II Stress Test – main facts:

Some of the final details for the stress test are still being proposed and have not yet been communicated fully but the main facts, know to date, around the Solvency II stress testare summarised below:

• The Solvency II stress test will be conducted in cooperation with the European Systemic Risk Board (ESRB) and the respective national supervisory authorities.



• The goal of the Solvency II stress test is to identify and quantify the impact of the different stress scenarios on an insurer’s financial position in an adverse and very severe economic environment.



• Insurance companies play an important role in the social and economic cycle. Managing financial resources and providing a sound financial foundation is vital for policyholders to manage their own personal risk.



• The Solvency II stress test is one of a range of supervisory tools for assessing the strength of individual institutions and to evaluate if the current structure supports the stability of financial markets.



• It helps EIOPA to understand capital positions of insurers and insurance groups in adverse situations.



• To conduct the Solvency II stress test, EIOPA is seeking the cooperation of the European insurance industry.



• The test is targeted toward the European insurance sector and will include a minimum of 50% of insurance companies per country measured by gross premium income.



• Currently, EIOPA is preparing a Solvency II stress test proposal including the scope of the exercise, framework and economic scenarios under which the financial positions will be tested.



• Before finalizing the framework of the Solvency II stress test, EIOPA will consult national supervisors and insurance associations.

The initiative is based on a request of the EU Economic and Financial Committee (EFC) and is being coordinated with the stress test being undertaken by the European Banking Authority (EBA) within the European System of Financial Supervisors (ESFS).



JMR Consulting UK Ltd recognises the importance of collaboration and information sharing to ensure companies meet Solvency II targets. With this in mind we have set up a partnership with other Solvency II practitioners called Gain-Line that offers the support you need to implement the changes demanded by the Solvency II directive, on time and at an affordable price. Our Solvency II service helps you avoid the drawbacks of hiring a traditional consultancy or the headaches associated with trying to recruit and develop specialist expertise in house.



To find out more about how JMR Consulting UK Ltd and Gain-Line partnership working together can provide a safe pair of hands for your Solvency II programme, please get in touch by using the contact form, sending an email to info@jmruk.com or calling us on 0845 052 0900.

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