BoE says rush to sell could undermine insurance stability

Supervisor questions whether some firms’ stress-test assumptions are “realistic”

Bank of England blue sky

Insurers may be overestimating their ability to sell assets into stressed markets, a senior supervisor at the Bank of England said on January 23.

Charlotte Gerken, executive director for insurance supervision, wrote to firms summarising the results of the BoE’s recent stress-testing exercise. She noted many life insurers had planned similar asset sales to cope with bouts of stress, which might interact with one another, undermining their effectiveness.

“Firms should, therefore, consider how

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