Speaking at the Insurance Risk and Capital EMEA 2020 virtual conference, Charlotte Gerken, Executive Director – Insurance Supervision, addressed the industry’s reaction to the Covid-19 pandemic, the Solvency II review and also set out BoE’s stress test plans for the insurance industry in 2021 and 2022.
BoE will:
- use the 2021 biennial exploratory scenario to explore the financial risks posed by climate change. This exercise will test the resilience of the current business models of the largest banks, insurers, and the financial system to climate related risks – as well as the scale of adjustment required in coming decades for the system to remain resilient
- run another comprehensive insurance stress test in 2022 which, amongst other things, will include a dedicated scenario for general insurers underwriting cyber risk, reflecting BoE’s view that firms still need to improve the way they assess and manage their cyber exposures