The contribution of insurers to systemic risk: A practical framework for regulators

Abstract

While insurers are not typically the most significant contributors to systemic risk, their actions and behaviour may materially contribute to such risk. This study considers the models that may be used to detect systemic risk originating in the insurance market and proposes a framework for identifying and classifying the sources of systemic risk attributable to insurers. It applies this framework to the insurance market in South Africa, in the process providing practical recommendations for consideration by all regulators.