UK life insurers show resilience in Bank of England stress test

LONDON, Nov 17 (Reuters) - The Bank of England said on Monday that Britain's largest life insurers were resilient to severe market stress, as it published the results of the first stress test conducted under a new regulatory framework implemented last year.

The test aims to assess firm resilience to severe but plausible events. The Prudential Regulation Authority (PRA) said all 11 firms taking part stayed above minimum capital requirements throughout the simulated downturn.

The test modelled a deep global recession with falling interest and inflation rates, sharp declines in equity and property values, and widening credit spreads.

The exercise, run every two years, was the first under the Solvency UK framework introduced last year. For the first time, the PRA will publish individual firm results next week.

Britain's large life insurance sector includes Aviva, Legal & General and Phoenix, among others.

Unlike the BoE’s stress testing of the UK banking system, the PRA life insurance stress test is not used to set capital requirements or buffers.

Aviva

Legal & General