Systemic Risk in the Insurance Sector – What Do We Know?

This paper reviews the extant research on systemic risk in the insurance sector and outlines potential new areas of research in this field. We summarize 30 theoretical and empirical research papers from both academia and practitioner organizations and provide a classification of existing research. Moreover, we discuss possible systemic risks posed by new regulation, such as Solvency II, the upcoming regulation for insurance companies in the European Union. Thus, this paper is of interest not only to academics, but is also highly relevant for the industry, regulators, and policymakers.