The Bank of England’s Prudential Regulation Authority (PRA) has issued new general insurance stress tests for events such as European windstorms, floods, US hurricanes, terrorism, motor liability and economic shock.

It comes after the PRA asked the UK’s largest insurers to join a stress-test exercise, to help it assess their resilience and see how they are developing their own risk and solvency assessments.

Supply chain disturbance and cyber loss can also be stress-tested, along with solar flare and geomagnetic storms. Two more categories are insurer-specific: one-in-200 insurance losses and reverse stress tests.

Banks, building societies, insurers and some investment firms are required to undertake reverse stress tests to assess scenarios and circumstances, and identify business vulnerabilities.

These differ from general stress and scenario testing, which examines outcomes arising from changes in circumstances.

For each stress test, insurers are required to provide details of expected reinsurance recoveries, split by reinsurer, and the likelihood of such an event. Insurers must also provide gross and net loss scenarios and detail other factors that would affect the size of the underwriting loss.

General insurers selected by the PRA must return their reports by October 1.