The European Insurance and Occupational Pensions Authority (EIOPA) published today its report on the activities of Colleges of Supervisors in 2022. The report highlights the importance of efficient and effective coordinated supervision of cross-border insurance groups in the EU and provides an overview of the main developments and the key topics discussed in the colleges.
The activities of the 64 colleges in 2022 mainly focused on the fast-changing macroeconomic environment, and its impact on the financial and solvency position and profitability of cross-border insurance groups. Other topics discussed included group-specific risks, ESG-related aspects, conduct of business issues, reinsurance as well as the activities related to financial conglomerates and internationally active groups.
While inflation had a limited impact in 2022 on the groups where a college was in place, it remains a key focus. The value of fixed income assets dropped due to rising interest rates. For groups offering long-term insurance products, these losses were offset by the decrease in liabilities.
The average SCR ratio at end of 2022 increased slightly on year-on-year basis, though some groups saw their SCR ratio drop due to valuation losses and/or higher SCR requirements. Given the sharp and rapid increase in interest rates, mass lapse risk has become more relevant in terms of capital requirement increase.
In 2023, EIOPA’s college work will continue to focus on the impact of the macroeconomic environment on the sustainability of groups’ business models, on climate change risk and on financial conglomerates, addressing these issues from both prudential and conduct of business perspectives.
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Colleges of supervisors are cooperative frameworks to enhance coordination and cooperation among National Competent Authorities in Europe. It facilitates the exchange of information, coordination of supervisory activities, and adoption of common approaches for overseeing insurance groups operating across borders.