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EU regulator to test insurers for long-term COVID financial hit



(Reuters) – European Union insurers will be stress tested for the effects of a prolonged COVID-19 pandemic scenario that could affect the value of their investments and business volumes.

The European Insurance and Occupational Pensions Authority said it would test 44 insurers and reinsurers for their resilience to the economic consequences of the pandemic and a "lower for longer" interest rate landscape.

Insurers are exposed to the economic environment through the return they can earn by investing insurance premiums, as well as from the level of demand for their products.

"We are still in the midst of a crisis," EIOPA Executive Director Fausto Parente told a news conference.

"The insurance sector is certainly not immune." [1

9659002] EIOPA, which last conducted such tests in 2018, said that it will also look at the macroeconomic effects of problems for the whole sector, with the results due in December this year.

The results will be published primarily together, rather than for individual companies, and will be used to provide recommendations and potential corrective action for insurance companies.

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