FX.co ★ Every tenth European insurance company failed the stress-test

About 10% of the European insurance companies which were forced to go through so-called stress-test appeared not to have enough capital for overcoming the potential economic turmoil. These figures are released as the results of survey conducted by the European Insurance and Occupation Pensions Authority, EIOPA.
Another 8% which underwent the test appeared to be unable to cope with the potential inflation risks. The test results indicated that due to capital deficit the insurance companies in case of economic distress would need 4.4 billion euro and due to the inflation risks (if the price growth makes central banks increase the interest rates) they would lack 2.5 billion euro.
At the same time, according to EIOPA, in general, the insurance sector of the European economy is able to stand against the economic troubles.
In total, about 221 insurance companies went through the test. As AFP informs, about 60% of the whole insurance market of 27 EU countries, including also Iceland, Lichtenstein, Norway and Switzerland, falls at the mentioned firms.
European countries continue testing the bank sector firms in order to clarify if they can withstand the potential crisis. According to the results of 2010 the majority of banks were declared stable to the probable worsening of economic situation. However, later experts recognized that test conditions were easy and strengthened them in 2011.