European insurers have proved they are strong enough to withstand a serious financial crisis, a regional supervisory group has announced following recent stress testing.

The Committee of European Insurance and Occupational Pensions Supervisors last week announced the results of regional stress testing, which it has passed to the EU Economic and Financial Committee.

Testing was undertaken to evaluate the resilience of the insurance sector after the failure of several banks during the global financial downturn. The EU Committee earlier endorsed the tests through a formal mandate.

Subsequent evaluation of 28 major European insurers using data from June 2009 found all displayed resilience even in severe situations.

Participants were asked to calculate the impact of stress tests on their solvency rations according to three scenarios, including the effect of a deep recession and spiralling inflation.

Though testing depleted notional available capital by up to 25% in some cases, funds remained above the regulatory minimum.