FRANKFURT (Reuters) - The European Union’s insurance sector is well capitalised despite challenges such as low interest rates and the disasters that have hit reinsurers, the bloc’s insurance and pension watchdog said on Wednesday.
The European Insurance and Occupational Pensions Authority (EIOPA), in a financial stability report, said that in addition to low rates, low market volatility and high levels of economic and political uncertainty were major challenges to the industry.
“Despite these challenges, the insurance sector remains well capitalised”, EIOPA said, noting that the median solvency rate, which measures a company’s health in times of stress, is greater than 200 percent.
The 2017 hurricane season - including Harvey, Irma and Maria in North America - could affect profitability and solvency levels of reinsurers, EIOPA said.
Swiss Re earlier on Wednesday estimated that global insured losses from catastrophes in 2017 will hit $136 billion, the third-highest on record for the sector, with the United States hardest hit.
Reporting by Tom Sims, editing by David Evans