Polish insurers are facing multi-faceted risks from Covid-19 pandemic-related crisis, mainly as markets jostle investments and valuations, the central bank wrote in its report on financial system stability.
While the main impact „is linked more to investment activity and to a lesser extent, insurance activity,” NBP wrote, „the risk of double-hit could materialize.”
On the risk list: valuations of held assets, a rise in technical and insurance reserves on the shift in the risk-free rate, to-date earnings reliance on future premiums in the life segment and the risk of reduced demand for insurance services, the NBP notes.
Insurers with stakes in banks, understood to mean state-controlled insurer PZU with stakes in both Pekao and Alior, could see hits to equity and solvency on downward valuations of the units, authors warn.
