This statement provides an early indication to industry of the Prudential Regulation Authority’s (PRA) intent to run a dynamic general insurance stress test in 2025.
Statement
The PRA intends to run a dynamic general insurance stress test in 2025.
The objectives of the exercise will be to:
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assess the industry’s solvency and liquidity resilience to a specific adverse scenario;
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assess the effectiveness of insurers’ risk management and management actions following an adverse scenario; and
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inform the Prudential Regulator Authority's (PRA) supervisory response following a market-wide adverse scenario.
The dynamic nature of the 2025 exercise represents a significant change from previous exercises and will involve simulating a sequential set of adverse events over a short period of time. Consequently, the PRA intends to engage with the industry including trade bodies over the next six months, with a view to providing more details of this exercise (including participation, des
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