Tag Archives: EDHEC

EDHEC: Solvency II Prudential Regulation – An Impediment To The Return Of Insurers To The Property Market

In a position paper entitled “The Impact of Solvency II Prudential Regulation on Property Financing in the Insurance Industry”, the Financial Analysis and Accounting Research Centre and the Economics Research Centre at EDHEC Business School conduct a critical analysis of the calibration of property risk under Solvency II prudential regulation.

This study, conducted in partnership with the French Ministry for Housing, tests the robustness of the calculations for two key elements within the Solvency II calibration – the size of the property shock (Value-at-Risk) and the correlation of real estate with other asset classes.

The challenge of this analysis is sizeable given that the European insurance sector currently has €10 trillion worth of outstanding investments. 

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