EIOPA bemoans lack of individual insurer disclosure in stress test

Europe's insurance regulator is worried about the industry's attitude toward transparency after most of the participants in its latest stress test refused to publish individual results.

Eight of the 44 participants gave consent for their results to be published in the 2021 test, an improvement over the four that consented from the 42 that participated in the 2018 exercise. Unlike stress tests in other parts of the financial services industry, publication of individual results is voluntary for European Economic Area insurers.

Announcing the results of the 2021 stress test Dec. 16, the European Insurance and Occupational Pensions Authority, or EIOPA, said it would ask lawmakers to consider making individual disclosure a legal requirement.

"We strongly believe that disclosure of high-level individual results would increase the sector's transparency and would further enhance the quality of the stress test exercise," Petra Hielkema, chair of EIOPA, said at a press conference.

Insurers' reluctance came despite "numerous changes" to the design of the 2021 test to address previously raised concerns, Hielkema said. Worries included the severity of the stress test, whether it would stray from the Solvency II framework and the wider market's interpretation of stressed solvency capital requirement ratios. Hielkema said EIOPA had "very consciously" remained within the Solvency II framework in the 2021 exercise. The regulator was only asking for a "very limited" set of data that does not include stressed solvency capital requirement ratios, the chair added.

Results of the 2021 stress test were positive in one respect, according to EIOPA, as they showed the industry would still be able to meet obligations under severe economic and market pressure. But the regulator also urged insurers to lower their reliance on Solvency II transitional measures, which will be phased out by 2032.

Companies that published individual results are Denmark's PFA Pension forsikringsA/S, Finland's OP Osuuskunta, Greece's The Ethniki Hellenic General Insurance Company SA, Iceland's Sjóvá-Almennar tryggingar hf., Malta's QIC Europe Ltd., Norway's Kommunal Landspensjonskasse gjensidig forsikringsselskap and Gjensidige Forsikring ASA, and Portugal's Longrun Portugal SGPS SA.