Bank of England to publish individual life insurer results in next sector stress test

By Huw Jones

LONDON (Reuters) – The Bank of England said on Wednesday it would use its new powers to publish individual results for life insurers in its next stress test for the insurance sector in 2025.

Until now, the BoE could only publish aggregate results for its health check of life and general insurers, in contrast with the bank by bank results it publishes in regular stress tests for banks that are pored over by analysts and investors.

Gareth Truran, director of prudential policy at the BoE, said individual results will be a “big shift” for life insurers and there is a need to make sure the results can be properly understood given their potential sensitivity.

The Bank aims to publish more details about its new approach to stress testing in the first half of next year, and invite comments.

“Our expectation is the first of the new stress tests will be launched in Q1 2025 with the publication in Q4 that year,” Truran said in a speech.

A major reform of insurance ‘Solvency II’ capital rules is being rolled out from the end of this year.

“For this next exercise, given the amount of reform under way for both us and firms over the next year or so, we expect individual disclosure of results for the largest life insurers will be one of the more material changes from our last stress test in 2022,” Truran said.

“Secondly, for general insurers, our approach to disclosure for our next stress test will remain, as before, on an aggregate basis – further details will be set out over the next month,” Truran said.

Last year, the European Union’s insurance watchdog EIOPA said the results of its own stress test of insurers should be made public on a company-by-company basis as well, instead of on an aggregate basis at present.

(Reporting by Huw Jones and Carolyn Cohn, Editing by Alexandra Hudson)