In the light of the events of the past few days on Wall Street, the CEA, the European insurance and reinsurance federation, has stressed that the situation for European insurers is not comparable with that of institutions affected in the US.

In the turbulence that has affected global financial markets European insurers have, inevitably, been affected by the general fall in equity prices and by limited exposures to writedowns in some asset classes. However, although the CEA cannot comment on the position of individual companies either here or in the US, the overall situation for European insurers is not comparable with that of US insurers.

"Europe's insurers have diversified income streams with a conservative asset mix and they have liabilities that tend to be much more stable in their pricing. The result is institutions that reflect typical insurance business by being geared for the long term. They are therefore unlikely to be overly affected by short-term liquidity concerns," said Michaela Koller, director general of the CEA.

"We believe that the proposed Solvency II regulatory regime for the European Union, by moving to an economic risk-based approach, will enhance the risk management in companies, improve their capital allocation and their ability to resist crises such as the current one and increase transparency. The European insurance industry is working hard to progress the introduction of Solvency II," added Koller.

The European insurance industry is at the forefront of measures to create Solvency II. While implementation of this approach is expected in 2012, it is already starting to shape an enhanced risk culture in many firms, based on a market-consistent approach, which enables risk to be better priced and ensures insurers are appropriately capitalised.

"Many of Europe's insurers have made good progress toward Solvency II and will continue to do so, in good market conditions and bad," Koller said.