PRA launches general insurance stress test 2017

PRA has asked the UK’s largest general insurers to provide information about the impact of a range of stress tests on their projected Own Funds, as well as providing additional information on their sectoral exposures to the UK economy.

The purpose of the exercise is to enable the PRA to assess the potential impact of severe events at the market level for the UK general insurance sector and to identify which firms would be most impacted by these events.

The exercise is split into two broad areas of interest:

  • Section 1: a set of five severe but conceivable scenarios (four natural catastrophe scenarios and one economic downturn scenario consistent with the Banking Stress Test).
  • Section 2: a capture of exposures that will allow the PRA to better understand the impact of potential losses by various sectors of the economy.

PRA has asked the firms involved for submissions by 5pm on 17 July 2017.