The EU’s insurance regulator has urged insurance companies across the bloc to suspend all measures aimed at rewarding shareholders, including dividend payments and share buybacks.

The European Insurance and Occupational Pensions Authority (EIOPA) said it was making the call due to the current level of uncertainty about the impact COVID-19 would have on financial markets and economies across Europe.

EIOPA said insurance companies should review the suspension as the financial and economic impact of the COVID-19 pandemic starts to become clearer.

Prudent approach

The regulator said what it described as “this prudent approach” should also apply to companies’ pay policies. In particular, it has asked insurance companies to look at postponing bonus payments.

The authority has been stressing the importance of insurance companies preserving their capital position in order to protect policyholders and absorb potential losses resulting from the impact of COVID-19.

The Bank of England has issued a similar statement to insurers in the UK.