The Swiss Solvency Test and its Market Implications
Eling M, Gatzert N, Schmeiser H (2008)
Publication Language: English
Publication Type: Journal article, Original article
Publication year: 2008
Journal
Publisher: Palgrave Macmillan
Book Volume: 33
Pages Range: 418-439
Journal Issue: 3
DOI: 10.1057/gpp.2008.20
Abstract
In this paper, we first discuss the characteristics and major benefits of the Swiss risk-based capital standards for insurance companies (Swiss Solvency Test), introduced in 2006. As the insurance industry is one of the largest institutional investors in Switzerland, changes to its asset and liability management as a result of the new regulatory framework could have striking economic effects. Thus, we further examine significant market implications for the Swiss economy due to possible changes in the asset and liability management of Swiss insurance companies. We investigate resulting effects on the Swiss capital market, focusing on bond, real estate, stock, foreign exchange markets, and the situation in case of a capital market crisis. Furthermore, we analyze potential consequences to corporate financing and product design. Most of the considered consequences result from the transition of past (in principle, not risk-based) supervision to risk-based supervision and can thus be generalized to other supervision systems, in particular Solvency II.
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Switzerland (CH)How to cite
APA:
Eling, M., Gatzert, N., & Schmeiser, H. (2008). The Swiss Solvency Test and its Market Implications. Geneva Papers on Risk and Insurance: Issues and Practice, 33(3), 418-439. https://doi.org/10.1057/gpp.2008.20
MLA:
Eling, Martin, Nadine Gatzert, and Hato Schmeiser. "The Swiss Solvency Test and its Market Implications." Geneva Papers on Risk and Insurance: Issues and Practice 33.3 (2008): 418-439.
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