On 8 October 2021 EIOPA published its second report on potential insurance failures: “Failures and near misses in insurance”. The report comprises 219 relevant cases from the European insurance sector.
Solvency II is not designed to be a zero failure regime and therefore recorvery and resolution planning is essential component of the regime. To that end, the better the cause of insurance failures are understood the more effectivly they can be identified and managed.
On 6 October 2018 Solvency II Wire published: A cross-border reinsurance spiral – a collaboration between Solvency II Wire and LCP – investigating early signs of insurance failures in order to assess the value and quality of the Solvency II public disclosures.
Using QRT and SFCR information from the Solvency II Wire Data database as well as qualitative research of other public disclosures the investigation uncovered regulatory failings at a European and international level.
In addition it was possible to devise a series of metrics based on the QRTs that could be used as potential early warning indicators of insurance failure.