On 22 December, the European Insurance and Occupational Pensions Authority (EIOPA) published a supervisory statement on inflation that aims to address the main impacts of inflation on insurance and reinsurance undertakings, which may affect both life and non-life business.
The statement supports consistent Solvency II calculations by raising awareness of the main impacts of higher inflation that (re)insurance undertakings could consider.
It focuses on:
- The impact of inflation on technical provisions
- Investments
- Solvency capital requirements
- Other elements (such as risk management systems)
National competent authorities are expected to monitor undertakings’ assessment of the impact of inflation on the elements mentioned above and any measures taken as a follow-up as part of the regular supervisory review process. Finally, through this statement, EIOPA seeks to foster convergence and consistent supervisory approach across Member States.
Insurance Europe