PRA has sent a letter to firms that were involved in the 2017 general insurance stress test and explained that its main findings were:
- the UK general insurance sector as a whole and individual firms are resilient to those scenarios within the regulatory threshold of Solvency 2; and
- with regard to reinsurance interconnectedness, PRA found no evidence of increase in the level of interconnectedness.
The letter includes details of high level results and comments on the following potential areas for improvement that impact underwriting, finance and risk functions:
- exposure management;
- accounting;
- post loss planning; and
- natural catastrophe modelling weaknesses.
PRA expects that the next stress test exercise will be in 2019.