LONDON -(Dow Jones)- European insurers are to undergo stress tests in December to help policymakers assess their resilience to shocks and to improve supervision, the European pensions' regulator said Friday.
The E.U.-wide exercise will focus on market and credit risks and will test three scenarios: One will be an adverse shock that reflects the performance of capital markets between end-September 2008 and end-September 2009.
The second will mirror a more prolonged and severe recession, and the third reflects a situation of inflation picking up rapidly leading to a steep rise in interest rates, the Committee of European Insurance and Occupational Pensions Supervisors, or Ceiops, said on its Web site.
The stress test will include all large and important insurance groups in Europe, Ceiops said. The Financial Times reported that Aviva PLC (AV.LN), Allianz SE (AZ) and Axa SA (AXA) would be among those.
-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com