Bucharest, 14 May 2021 - The table of risks for the EU insurance sector, based on Solvency II data for the fourth quarter of 2020, indicates that the exposure of insurance companies to macro risks remain high, according to the latest Report on trends and risks in the financial markets prepared by the Financial Supervisory Authority.
European supervisors expect an increase in credit risk over the following 12 months, reflecting concerns about corporate debt.
In terms of macro risk, estimates of GDP and inflation have increased and financial markets have remained stable amid rising bond volatility and concerns regarding commercial real estate investment.
The solvency position of life insurance registered an increase, while those of insurance deteriorated.
The profitability of insurance companies, measured by return on assets and excess of assets over liabilities had improved due to positive market performance.
However, the profitability of insurance companies is lower compared to the levels recorded before the COVID-19 pandemic. Insurance risks remain at a medium level, despite the deterioration of certain indicators, the same level is maintained in terms of market perceptions.
In Romania, at the end of 2020, insurance companies directed 79% of investments in government bonds, while in the EEA only 31% of the investments were in government bonds and 27% in corporate bonds.
More details about the risks and trends of the week on the financial markets can be found in issue no. 19 / 12.05.2021 –Report on trends and risks on local and international financial markets, which can be accessed HERE (available in the Romanian language)
About the Financial Supervisory Authority
The Financial Supervisory Authority is the national authority, established in 2013 by GEO 93/2012 approved by Law 113/2013, for the regulation and supervision of the insurance markets, private pensions, as well as the capital market. The FSA contributes to strengthening the integrated functioning framework of the three sectors, amounting to over 10 million participants. More information can be found on www.asfromania.ro.