EIOPA has published on Friday a report on the “Impact of ultra-low yields on the insurance sector, including first effects of COVID-19 crisis” (here).
EIOPA notes that one of the major concerns for the insurance market is the exceptionally ultra-low/negative level of interest rates. And in addition, the Covid-19 outbreak has severely affected the macroeconomic and market conditions worldwide, with the launch of support packages and monetary easing of some central banks and governments taking place to mitigate the negative effects.
The report assesses the risks and implications of the ultra-low/negative yields on the investment behaviour of insurers, considers how challenged the profitability and solvency positions of the European insurance market are and it describes the impact on the insurance business models and consumers.