Insurance companies should take measures to preserve their capital position and be prudent about dividend and bonus payments as the coronavirus outbreak disrupts households and businesses, the European insurance watchdog said.
“Insurers are likely to face progressively difficult conditions in the immediate future, both in terms of navigating challenging market conditions and in maintaining operations,” the European Insurance And Occupational Pensions Authority (EIOPA) said in a statement.
Insurance companies should be ready to implement the necessary measures to ensure business continuity, EIOPA said, adding that recent stress tests had shown that the sector is well capitalized and able to withstand severe but plausible shocks to the system.
EIOPA urged national regulators to be flexible regarding the timing of 2019 financial reports and that EIOPA will ease some of its own requests of information for insurers.
(Reporting by Arno Schuetze; Editing by Michael Nienaber)