’The dynamic nature of the exercise represents a significant change from previous exercises,’ says regulatorInsurance firms are set to face “dynamic” stress tests in 2025 to ensure the sector can remain resilient in the face of “adverse scenarios”. “[It will] inform the PRA’s supervisory response following a market-wide adverse scenario.”RegulationThis came following the industry undergoing a regulation shakeup. Meanwhile, the Consumer Duty regulation requires insurance firms to review their products and services against a new standard of fairness, with companies working to measure, analyse and benchmark their performance across a number of different metrics. To ensure firms are ready to face the new stress tests, the PRA is set to engage with the industry over the next six months, with a view to providing more details of the exercise during the first half of 2024. Once the simulations are complete, results of the exercise will be disclosed at an aggregate industry level.

Source: The Times October 04, 2023 06:21 UTC