Natural disasters would have only a minimal impact on VIG's activity

19 December 2018 —
Austrian insurer VIENNA Insurance Group shows strong resilience in the latest EIOPA stress test, in all three quantitative test scenarios, VIG achieving results of between 158% and 215% including the volatility adjustment - well above the required minimum solvency ratio of 100%, the company announced in a statement.

42 European insurance groups took part in the EIOPA stress test between May and August 2018.

Vienna Insurance Group (VIG) was the sole Austrian insurance group to be invited to take part in the European Insurance and Occupational Pensions Authority's (EIOPA) stress test.

Three quantitative scenarios were assessed on the basis of VIG's solvency ratio of 220% as of 31 December 2017.

The first scenario examined the impact on solvency of increasing interest rates combined with market value decline, mass surrender of insurance contracts and rising costs due to inflation.

The second scenario considered the protracted period of low interest rates, combined with market value decline and increased life expectancy.

The third scenario focused on natural disasters, assuming the occurrence of eight specifically defined catastrophes across Europe.

In contrast to previous EIOPA stress tests, this year's assessment covered not only the effects on equity, but also the impact of stress on solvency.

According to the press released by the Austrian insurer, "even in the most challenging scenario for the Group, the solvency ratio was a solid 158%, or 138% without the volatility adjustment. Performance in the low-interest-rate scenario was even stronger, at 186%, or 171% without the volatility adjustment. Owing to VIG's conservative and effective reinsurance policy, natural disasters would have only a minimal impact - in this scenario, the solvency ratio would decrease from 220% as at year-end 2017 to 215%".





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