Insurance and Financial Stability
17 Pages Posted: 5 Oct 2015
Date Written: September 18, 2015
Insurance companies play an important role in supporting economic activity. But insurers are exposed to a number of risks and can become distressed or fail. This article considers a number of channels through which insurance companies could have adverse effects on financial stability, including: how insurer distress or failure might disrupt the provision of critical services to the real economy; and how their behaviours can propagate systemic risk in the financial system. The Financial Policy Committee has an ongoing work-plan to assess the extent of risks to financial stability from insurance companies’ activities.
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