* Tests show resilience to natural catastrophe shock
* Results also tested for interest rate shocks
* European insurers are extremely stable - GDV (Updates with details from the report)
By Tom Sims
FRANKFURT, Dec 14 (Reuters) - Europe's biggest insurers successfully withstood the latest tests of their ability to cope with severe market shocks, the European Union's insurance watchdog said on Friday.
The European Insurance and Occupational Pensions Authority (EIOPA) published results of this year's stress test of 42 insurers, representing around 75 percent of the market.
"On aggregate, the sector is adequately capitalized to absorb the prescribed shocks," EIOPA said in its report. Although EIOPA names those tested, the results are mostly aggregated and anonymous.
The industry health check, taken every two years, simulated three extreme theoretical shocks to see how insurers, including the region's biggest players, would cope.
In one scenario, insurers were tested for a series of theoretical natural catastrophes to hit Europe - four windstorms, two floods, and two earthquakes.
The result was "high resilience", EIOPA said, with minimal decrease in assets over liabilities.
A second involved a sharp and sudden rise in interest rate, in which assets dropped by nearly a third.
Although the overall solvency ratio - a key measure of capital - was 145 percent, above a required 100 percent, the ratio of six groups dropped below this level.
The third scenario tested a prolonged period of extremely low interest rates, making it harder for insurers to earn enough to cover policy payouts, and an increase in life expectancy.
In that case, assets fell by 28 percent, while the solvency ratio on the whole was 137 percent. However, seven insurers registered a solvency ratio below 100 percent.
The German insurance association GDV said that the tests showed that European insurers were extremely stable.
Four companies, which maintained solvency ratios above 100 percent in the tests, allowed EIOPA to publish their individual results. They included Vienna Insurance Group, Spain's Mapfere, and two Danish insurers. (Reporting by Tom Sims; editing by David Evans and Alexander Smith)