EIOPA published the first paper of a series of three with the aim of contributing to the debate on systemic risk and macroprudential policy. This debate normally focuses on the banking sector due to its role in the recent financial crisis. With this paper series EIOPA aims to ensure that an extension of the debate on systemic risk to the insurance sector reflects the industry’s specific nature.
The first paper includes the following:
- The first part of the paper outlines the lessons learnt from the financial crisis and the banking sector for the insurance sector as well as the current status of the debate within the insurance sector.
- The second part explains the social dimension of macroprudential policy and financial stability.
- The third part identifies and analyses the sources of systemic risk in insurance outlining three potential sources of systemic risk: entity-based, activity-based and behaviour-based sources.
- The fourth part contains a proposal for a macroprudential framework for insurance and defines specific operational objectives based on the sources of the systemic risk previously identified.
The full paper is available here https://eiopa.europa.eu/Publications/Reports/Systemic%20risk%20and%20macroprudential%20policy%20in%20insurance.pdf