UK regulator the Bank of England’s Prudential Regulation Authority (PRA) has published ‘Approach to LIST [life insurance stress test] 2025’, the organisation’s precursor to its planned stress testing of UK life insurers in 2025.
The PRA’s 2025 life insurance stress test has three objectives: to assess sector and individual firm resilience to severe but plausible events; to strengthen market understanding and discipline through individual firm publication; and to improve insight into risk management vulnerabilities. It will apply to UK life insurers active in the bulk purchase annuity market with the largest annuity portfolios and will be run under the new Solvency UK regulatory regime.
The next step is for the PRA to receive feedback on its request for technical input, which closes on September 6 this year. The LIST is planned to begin in early January 2025, with the findings due to be published in the fourth quarter of next year.