In November, EIOPA delivered results of its EU-wide insurance stress test which was designed to assess the resilience and identify vulnerabilities of this sector. Some have called this test a wake-up call for managers of insurance companies who are now looking at options how to best adapt to Solvency II – the new and stricter capital rules for companies in the insurance sector, applicable from January 2016.
This concerns especially smaller insurance companies who have failed the test – with 14% seemingly significant in number, but representing only 3% of total assets. Mergers and Acquisitions (M&A) are expected to boom in this category of insurers throughout 2015, with Solvency II as the key driver of this development.
Also in 2015, EIOPA will be conducting a pension stress test. “Our intention is that the pension stress test will cover IORP’s that provide defined benefit schemes as well as the ones that finance hybrid or defined contribution plans,” says Gabriel Bernardino, Chairman of EIOPA.