European Union insurers will be stress tested for the impact of a prolonged COVID-19 pandemic scenario which could affect the value of their investments and business volumes.

The European Insurance and Occupational Pensions Authority (EIOPA) said it will test 44 insurers and reinsurers for their resilience to the economic consequences of the pandemic and a “lower for longer” interest rate landscape.

Insurers are exposed to the economic environment through the returns they can earn from investing insurance premiums, as well as from the level of demand for their products.

“We are still in the middle of the crisis,” EIOPA Executive Director Fausto Parente told a media conference.

“The insurance sector is for sure not immune.”

EIOPA, which last undertook such tests in 2018, said it will also look at the macro-economic impact of problems for the whole sector, with the results due in December this year.

Results will mainly be published in aggregate, rather than for individual firms and will be used to provide recommendations and potential remedial actions for insurers.