The Insurance Supervision Agency of Montenegro published the results of its second stress test of the Montenegrin insurance sector, run in 2024 using European Insurance and Occupational Pensions Authority (EIOPA) methodological standards as part of preparation for future application of the Solvency II framework. The exercise used 31 December 2023 as the reference date and covered eight of the nine insurers operating in Montenegro. The stress test was implemented on the assumption that Montenegro is an EU Member State, with insurers stressing the Solvency Capital Requirement (SCR) under adverse market scenarios driven by shocks to euro risk-free swap rate term structures, an increase in yields on Montenegro government bonds, and inflation shocks affecting claims costs for non-life insurers. Insurers revalued assets and liabilities using the prescribed euro risk-free curves, with an option to apply the volatility adjustment, while certain standard EIOPA stress test elements such as increased policy lapses were excluded to reflect local market specifics. The agency plans to run the next sector stress test in 2027 and to continue education and support activities aimed at preparing the industry for the EU insurance regulatory framework.
Insurance Supervision Agency of Montenegro 2025-01-17
Insurance Supervision Agency of Montenegro publishes results of second Solvency II-aligned stress test of insurers
The Insurance Supervision Agency of Montenegro released results from its 2024 stress test of the Montenegrin insurance sector, conducted using European Insurance and Occupational Pensions Authority standards. The test, covering eight of nine insurers, assumed EU membership and stressed the Solvency Capital Requirement under adverse scenarios, including euro risk-free swap rate shocks and inflation impacts. Another stress test is planned for 2027 to further prepare for the EU insurance regulatory framework.