On 6 July 2020, the Dutch Central Bank (De Nederlandsche Bank, DNB) announced that it will review dividend proposals from insurers under its supervision as usual.

In the beginning of April 2020 there was a call to temporarily suspend the distribution of dividends and the buying back of own shares until there would be more clarity around the impact of the COVID-19 pandemic. DNB supports the recent recommendation from the European Systemic Risk Board (ESRB) that financial institutions, including insurers, should refrain from distributing dividends or buying back shares until at least the end of 2020, ensuring that institutions are able to withstand the potentially severe shock caused by the COVID-19 pandemic. DNB notes that the call is therefore explicitly linked to COVID-19.

With regard to insurers, DNB notes that the recommendation is being implemented in different ways in Europe and the direct impact of the coronavirus crisis on insurers has so far been limited. In light of this, DNB will assess dividend proposals from insurers as per usual again.

DNB does note that insurers which, despite ESRB’s call, are still considering distributing dividends or buying back shares will in any case need to make a thorough, forward-looking analysis in the light of the COVID-19 pandemic and, for example, the sustained low-interest rate environment. In doing so, DNB expects a careful analysis of the uncertain outlook based on the supervisory framework and its own capital policy.