- Central Bank changes PRISM ratings for insurers, and reports suggest many have moved to lower (risk) rating
In recent weeks insurance companies have been informed by the Central Bank about the effect of its Prudential Impact Models review on their PRISM ratings. The new models, which were published in February, represent the most fundamental change to the system since it was introduced in 2011. Since then there have been many changes to strengthen financial regulation, including Solvency II, MiFID II and the Payment Services Directive and much new data is available to the Central Bank.
- Effect of C19 on insurance company results already significant
WHILE the financial impact of Covid-19 on the insurance sector has already been significant. Lloyds of London estimates a global underwriting loss for this year of over $100 billion, compounded by a similar sized fall in the value of investment portfolios. Business Interruption is proving to be a contentious issue, with legal disputes the focus of much attention. But despite all this, writes Insurance Correspondent John Lyons, stock markets have not been unduly spooked about the outlook for the insurance sector.
- Insurance companies are coming to terms with widespread misunderstanding of the sector
Against a background of anxiety and misinformation, the insurance industry is coming to grips with customer concerns mainly related to business interruption cover and travel insurance, writes Finance Dublin’s Insurance Correspondent John Lyons. He points put that globally it is expected that the life sector will be worst hit, mainly because of investment guarantees and loss of investment income, but most Irish life business is unit linked, with the investment risk carried by the policyholder. Most of the large international reinsurers, he adds, seem confident of their ability to withstand the pandemic without exceptional damage.