Beyond single-risk thinking: polycrisis consideration for the insurance sector
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EIOPA article arguing that the insurance sector should analyse how risks interact and amplify each other in a polycrisis. It highlights three areas: private credit and illiquid assets, asset-intensive reinsurance and dependence on digital ecosystems and ICT providers.
Key points
- Private credit accounts for around 5% of EEA insurers' total assets
- EIOPA is working with national supervisors on expectations for asset-intensive (funded) reinsurance
- ICT risks are the most immediate potential source of systemic operational stress
Who is affected
Insurers, reinsurers and supervisors
Plain-language version
A polycrisis is when several problems hit at once and make each other worse. EIOPA, the EU watchdog for insurers and pension plans, urges insurers to stop looking at each risk separately. It flags three areas: hard-to-sell investments such as private credit, certain reinsurance deals, and reliance on IT suppliers, which it sees as the most immediate threat.
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Summary produced with artificial intelligence from the official publication. It may contain errors: always check the original document.
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